Updated April 3, 2026 / 4:56 PM EDT / CBS News
U.S. hiring bounced back in March, with employers adding 178,000 jobs, the Department of Labor reported. The gain topped expectations and came after a steep drop in February.
By the numbers
March payrolls far exceeded the FactSet consensus forecast of 60,000. The unemployment rate ticked down to 4.3% from 4.4% in February. Health care led hiring with 76,000 jobs as nurses returned to work after earlier strikes. Construction employment rose by 26,000 and transportation and warehousing added 21,000. Federal payrolls continued to shrink, declining by 18,000.
February’s figures were revised sharply lower to a loss of 133,000 jobs, worse than the initial 92,000 decline; that weakness reflected health care strikes and winter storms. Over the first three months of 2026, employers averaged about 68,000 net hires per month.
What economists say
Economists described the March report as evidence of isolated strength in the labor market. Olu Sonola, head of U.S. economics at Fitch Ratings, called it ‘a great Friday for the labor market,’ pointing to rebounds from strike-related absences and solid gains in construction and manufacturing.
Public sentiment remains gloomy: a late-2025 Gallup poll found 72% of Americans think it is a bad time to look for work, a sharp rise from a year earlier. Younger workers, especially many in Gen Z, continue to struggle to find jobs, and worries persist about how artificial intelligence will shape future employment. Federal Reserve Chair Jerome Powell told students at Harvard that ‘there’s no denying it’s a challenging time to enter the labor market,’ while noting there are also long-term opportunities.
Higher energy costs tied to U.S. and Israeli strikes on Iran on Feb. 28 could weigh on hiring later in the year, warned James McCann, senior economist of investment strategy at Edward Jones. Fuel prices have climbed, with domestic gasoline above $4 per gallon and oil trading over $100 a barrel.
Layoff announcements have stayed relatively muted. Outplacement firm Challenger, Gray & Christmas reported roughly 60,000 announced job cuts in March — up from February but down from a year earlier.
Impact on interest rates
Analysts pointed to persistent 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 a clear return to stronger momentum. Laura Ullrich of the Indeed Hiring Lab described the early-2026 picture as one of ‘recalibration rather than acceleration.’
The March gain eases some near-term pressure on the Federal Reserve to cut interest rates. Fed officials kept the benchmark rate unchanged at their March meeting and left open the possibility of a 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 weigh potential effects from the U.S.-Iran conflict and rising energy costs on the Fed’s dual mandate.
Edited by Aimee Picchi