- A new Labor Department report shows U.S. employers added 178,000 new jobs in March.
- March job growth far exceeded expectations and unemployment ticked down.
- The positive data comes amid wide-ranging economic fallout from the ongoing Iran war.
Following a loss of over 130,000 jobs in February, the U.S. employment sector made an unexpectedly robust turnaround in March with employers adding nearly 200,000 positions last month, according to a Friday report from the U.S. Labor Department.
Friday’s Employment Situation Summary, assembled by the Bureau of Labor Statistics, shows U.S. employers added 178,000 positions in March and the nation’s unemployment rate moved down a tenth of a percent to 4.3%. Most economists were widely expecting unemployment to hold steady at 4.4% last month and the job creation volume to come in around 59,000 positions.
The new report also includes revisions to jobs data from the first two months of the year with February’s tally moving down 41,000 to 133,000 total job losses that month. January’s adjustment added 34,000 jobs, bringing the new jobs figure for that month to 160,000. After revisions, the average job creation rate for the first quarter of 2026 comes in at 68,000 new jobs a month.
“The bottom line is March was somewhat encouraging, but it’s been a rocky year for the labor market with almost no hiring since last April,” Heather Long, chief economist at Navy Federal Credit Union, told CNBC. “The March data will keep the Federal Reserve on hold, but no one is declaring victory yet. It’s likely to be a tough spring for job seekers.”
Health care employment was the primary driver of the March jobs growth with the sector adding 76,000 positions for the month. The construction industry added 26,000 new jobs and transportation/warehousing businesses grew their employment rolls by 21,000.
The unexpectedly positive new jobs data comes amid a wave of economic fallout from the ongoing Iran war.
When will gas prices keep going up?
U.S. gas prices broke the $4 per gallon mark Tuesday and continue to rise.
Drivers across the country are currently paying an average of just over $4.09 for a gallon of regular, almost $1 per gallon more than this time last month, according to tracking by AAA.
Petroleum industry experts say the cost is likely to keep rising as the Iran war nears the end of its fifth week. The last time U.S. prices exceeded $4 per gallon was at the onset of Russia’s invasion of Ukraine in 2022. Prices would eventually hit an all-time high of over $5 per gallon in June of that year.
“Gasoline and diesel prices continue to climb to multi-year highs as the effective closure of the Strait of Hormuz curtails the flow of millions of barrels of crude oil each day,” said Patrick De Haan, head of petroleum analysis at GasBuddy, in a blog post earlier this week. “The situation remains highly volatile and unpredictable, but upward pressure on fuel prices is likely to persist as long as global oil supplies are constrained by the continued disruption in the Strait.
“Americans have already spent nearly $8 billion more on gasoline over the past month, a trend that poses growing risks to the broader economy, while surging diesel prices may begin to reaccelerate inflation.”
How will rising energy costs impact the broader economy?
A report released last week forecasts that the increase in energy costs is on a path to foment even broader negative impacts on the U.S. economy.
The analysis from the Organization for Economic Cooperation and Development predicts U.S. inflation will rise to 4.2% in 2026, far ahead of the 2.68% average rate throughout 2025.
“The evolving conflict in the Middle East has human and economic costs for the countries directly involved, and will test the resilience of the global economy,” the report reads. “A halt in shipments through the Strait of Hormuz and the closure or damage of energy infrastructure has generated a surge in energy prices and disrupted the global supply of energy and other important commodities, such as fertilizers.
“The breadth and duration of the conflict are very uncertain, but a prolonged period of higher energy prices will add markedly to business costs and raise consumer price inflation, with adverse consequences for growth.”
While gas prices may be the most clear evidence of impacts the Iran war is having on family budgets, higher energy costs come back to hit consumer pocketbooks in numerous other ways.
Diesel fuel, which powers the trucks and other vehicles that transport raw materials, consumer goods, agricultural products and much more, is much more expensive than before the conflict began. The average price for a gallon of diesel across the U.S. was $5.53 on Friday according to AAA, up from $3.89 per gallon a month ago.
