U.S. Employment Growth in March 2023
In March, the U.S. saw an increase of 178,000 jobs, causing the unemployment rate to drop to 4.3%. This was a surprise, as economists had predicted a much more modest rise of 59,000 jobs, with the unemployment rate staying at 4.4%. Last month’s estimate had even suggested a decrease of about 92,000 jobs, but that number has now been adjusted to an even more significant drop of 133,000.
The employment numbers for February were revised downward, primarily due to a major strike within the healthcare sector, but March brought a change. The healthcare industry bounced back, adding 76,000 jobs that month. Over the last year, this sector has averaged around 29,000 new hires monthly.
In the construction field, employment rose by 26,000. The transportation and warehousing sectors also contributed, with an increase of 21,000 jobs, while manufacturing added 15,000 to its rolls.
Despite these gains, the federal workforce continued to shrink under the Trump administration’s efforts to streamline government operations. There was a loss of 18,000 federal jobs, and since the peak in October 2024 under the Biden administration, federal employment has plummeted by 355,000 jobs, or about 11.8%. In contrast, the private sector saw a growth of 186,000 jobs.
Interestingly, the financial sector is experiencing a downturn as well, with a loss of 15,000 jobs in March, bringing the total decline to 77,000 from a peak in May 2025.
On a positive note, recruitment expanded in March. The Private Sector Diffusion Index, a measure from the Labor Ministry that tracks job growth across industries, increased from 49.2 in February to 56.8 in March. A figure above 50 indicates that more sectors are adding jobs rather than cutting them, suggesting a broadening of job gains across various industries.
Wages also saw a modest rise, with the average hourly wage for all employees going up by 9 cents, or 0.2%, reaching $37.38. Year-over-year, average wages surged by 3.5%, outpacing inflation rates. The wage for production and non-supervisory workers in the private sector edged up by 5 cents, also a 0.2% increase, bringing it to $32.07 in March. However, the average working hours per week did decrease slightly, slipping from 34.3 to 34.2 hours.
Additionally, the labor force participation rate dipped from 62% to 61.9%.
The forecast for January was positively adjusted, showing an increase of 34,000 jobs, raising the total from 126,000 to 160,000. When combined with February’s downward revision, job creation for the first two months of the year was about 7,000 lower than expected.
