Updated on: April 3, 2026 / 4:56 PM EDT / CBS News
Hiring across the U.S. rebounded in March after a sharp drop the previous month, with employers adding 178,000 jobs, the Department of Labor reported.
By the numbers
March’s payroll gains far exceeded the FactSet consensus forecast of 60,000. The unemployment rate fell to 4.3% from 4.4% in February.
Health care led the gains with 76,000 jobs as nurses returned to work following earlier strikes. Construction added 26,000 jobs and transportation and warehousing added 21,000. Federal employment continued to decline, down 18,000.
February’s payrolls were revised sharply lower to a 133,000 drop, worse than the initial 92,000 figure; that month’s weakness reflected health care strikes and winter storms. Over the first three months of 2026, employers averaged 68,000 job gains per month.
What economists say
Economists said the strong March report shows pockets of labor-market strength. Olu Sonola, head of U.S. economics at Fitch Ratings, called it “a great Friday for the labor market,” noting the bounceback from the health care strike and solid gains in construction and manufacturing.
Still, public sentiment remains pessimistic: a Gallup poll from late 2025 found 72% of Americans said it was a bad time to find a job, up sharply from a year earlier. Younger workers, including many in Gen Z, are having particular difficulty finding work, and concerns persist about how artificial intelligence will affect employment. Federal Reserve Chair Jerome Powell recently told students at Harvard that “there’s no denying it’s a challenging time to enter the labor market,” while noting long-term opportunities.
Higher energy prices stemming from the U.S. and Israel strikes on Iran on Feb. 28 could damp hiring later in the year, James McCann, senior economist of investment strategy at Edward Jones, warned. Fuel costs have risen, with domestic gasoline above $4 per gallon and oil topping $100 a barrel.
Layoffs have remained relatively muted. Outplacement firm Challenger, Gray & Christmas reported roughly 60,000 announced job cuts in March—up from February but down year over year.
Impact on interest rates
Analysts pointed to longer-term headwinds such as slow job creation, a shrinking labor force and a rising share of long-term unemployed workers. Stephen Brown, chief North America economist at Capital Economics, said March’s strength largely reflects a reversal of strike and weather effects rather than renewed momentum. Laura Ullrich of the Indeed Hiring Lab described the picture so far in 2026 as one of “recalibration rather than acceleration.”
The March report reduces near-term pressure on the Federal Reserve to cut rates. Fed officials kept the benchmark rate steady at their March meeting and still flagged a possible cut in 2026, but several economists now expect no cuts this year. Glassdoor chief economist Daniel Zhao said the report “alleviates pressure on the Federal Reserve to act immediately” while allowing policymakers to consider the potential effects of the U.S.-Iran war and rising energy prices on the Fed’s dual mandate.
Edited by Aimee Picchi