According to data published on Friday by the US Department of Labor (BLS), the United States created 178,000 jobs in March after destroying almost as many the previous month. The unemployment rate, meanwhile, slightly dropped to 4.3%, almost reaching the same level as a year ago, which falls within the full employment range. Markets had expected significantly fewer job creations, with MarketWach’s consensus estimating around 59,000 positions.
“My economic policy has created an extremely powerful engine that nothing can stop,” reacted Donald Trump on his Truth Social network. He mentioned the job growth in construction, a result, according to him, of his measures favoring the relocation of industry to the United States, even though the vast majority of job creations in March came from other sectors, namely healthcare and tourism.
Context:
- The US job market created 178,000 jobs in March.
- The unemployment rate dropped to 4.3%.
Fact Check:
- The data was published by the US Department of Labor.
Impact of Geopolitical tensions
White House deputy spokesperson Kush Desai reiterated the mantra of the administration that disruptions related to the Middle East war, triggered on February 28 by Israeli-American airstrikes on Iran, would be “temporary.” The conflict, leading to a spike in gas prices, is expected to increase production costs for companies, somewhat deter consumption, and weigh on growth and employment, according to economists.
In the meantime, BLS data has shown fluctuating numbers in recent months. February’s figures of 92,000 job losses came as a thunderbolt, and the updated statistics released by BLS on Friday revealed an even gloomier picture: 133,000 job losses.
The period was notably marked by a strike in healthcare, with temporarily omitted workers now back in the statistics. The end of the strike led to a correction, though not explaining the extent of the recovery. Jobs were also created in March in construction and logistics, as highlighted by BLS.
Context:
- Geopolitical tensions in the Middle East affecting the job market.
- Job losses reported in February and March.
Trend of Slowing Hiring
“If we take a step back and look beyond the statistical volatility, the average job creations for February and March revolve around 23,000 monthly creations,” observed economist Lydia Boussour from EY-Parthenon. “This is in line with what we have previously seen: a labor market that is holding but has become more fragile,” continued Lydia Boussour.
For almost a year, the American job market has been described by experts as being in a “no hire, no fire” or “low hire, low fire” mode. Companies, impacted by President Donald Trump’s tariffs and the recent war outbreak, refrain from recruiting without significantly reducing their workforce.
Context:
- Hiring slowing down in the US.
Decline in Labor Force Participation
Another point to keep in mind, according to Lydia Boussour, is the dynamics in the labor force, which is stagnant or declining against the backdrop of aging and strict migration policies under the Trump administration. According to the BLS report, the labor force shrank by nearly 400,000 people between February and March. The participation rate stands at 61.9%, “its lowest level since early 1977, excluding the pandemic,” highlighted Lydia Boussour. As the demand for workers is low, it does not create tensions at the moment but contributes to a fragile balance, added the economist.
