March Employment Report: Job Growth and Wage Trends

The recent jobs report reveals some surprising developments in the job market. The unemployment rate has dipped to 4.3%. Experts are now reflecting on how this will impact inflation, Federal Reserve policies, and the broader U.S. economy.

In March, the economy added 178,000 new jobs, which, interestingly, surpassed the forecasts of economists who expected only about 60,000. However, wage growth appears to be lagging behind expectations.

The Bureau of Labor Statistics reported that average wages increased by 0.2% on a monthly basis and 3.5% when compared to last year. Yet, these figures fell short of what analysts had anticipated—specifically, a 0.3% month-on-month and a 3.7% year-on-year increase.

This adds to the sense that wage growth is slowing down; in February, for example, wages had risen by 0.4% month-on-month and 3.8% year-on-year.

Additionally, the average weekly working hours dropped slightly from 34.3 hours in February to 34.2 hours in March, which is below what economists had predicted.

The average hourly wage for workers in the private sector was reported at $37.38, a modest increase from $37.29 in February.

Brett Kenwell, an investment analyst at EToro US, described the overall jobs report as “encouraging,” although he noted that wage data has highlighted some “softer details.” He suggested that rising energy costs are having immediate effects on consumers.

Lydia Boussour, a senior economist at EY Parthenon, commented on the lack of momentum in wage growth. She expressed concerns about rising gas prices and their impact on disposable income, indicating that this could make consumer budgets even tighter.

Boussour also foresaw 2026 as a period characterized by constrained labor markets, selective hiring, reduced wage growth, and potential workforce downsizing due to tight labor supply.