A Miraculous March Jobs Report
178,000 new jobs, unemployment down to 4.3%
This post is sponsored by KODIAK – Proven Workforce Solutions. I wouldn’t accept a sponsor for this newsletter unless they were 1) a company I trust and 2) addressing critical issues like skilled labor shortages in construction. KODIAK, which recently merged with Pivot, checks both those boxes. Their mission is to help construction companies find experienced talent, including engineers and project managers for Direct Hire, as well as skilled craft professionals like welders and electricians for contingent staffing. With over three decades of experience, I encourage contractors struggling to find workers to consider KODIAK.
The labor market bounced back big time in March. U.S. employment grew by 178,000 jobs, the most in any month since December 2024, while the unemployment rate ticked down to 4.3%.
We averaged 68,000 jobs per month through the first quarter of 2026, the most of any three-month period since February to April of 2025.
Yes, job growth remains heavily concentrated in just two segments, healthcare and leisure and hospitality, but that’s been the case. Don’t expect the composition of job growth to change anytime soon.
For an economy with an aging labor force, subdued levels of immigration, and extraordinary policy uncertainty, March’s jobs report was about as good as it gets.
But that was March.
Is Time a Flat Circle?
364 days ago, I opened my post on the March 2025 jobs report with: “Writing about March’s labor market data after Wednesday’s [Liberation Day] tariff announcements is like reviewing a patient’s routine blood work from a month ago while they’re in shock trauma with a stab wound to the neck.”
Yes, that was a bit dramatic, but it was also right. We’ve averaged just 22,000 jobs per month since Liberation Day, fewer than a third of the 76,000 jobs averaged during the 12 months before it.
It’s tempting to make a similar comparison with today’s jobs report, which gives us our last glimpse employment dynamics prior to the economic fallout from the conflict in Iran.
I’ll resist that temptation. Today’s jobs report, unlike the March 2025 one, provides a valuable signal about the state of the labor market even with the conflict in Iran weighing on growth in the coming months.
The Upshot
First, you should feel better about the economic outlook than you did yesterday.
Second, the conflict in Iran is still deeply concerning. If the Strait of Hormuz remains closed too much longer, it’s going to cause real and lasting economic damage (more than it already has, anyway).
Third, this looks a lot like full employment. The Fed won’t be in a rush to cut rates.
What’s Next
Anirban is working on Week in Review, our every-Friday post that gives you everything you need to know about the economy in a breezy, five-minute read. That will be out in the next few hours and is just for paying subscribers. If that’s not you and you want it to be, just click the button below: