March Job Gains Mask a Volatile Labor Market as Iran War Chaos Mounts

March Job Gains Mask a Volatile Labor Market as Iran War Chaos Mounts

After February’s losses, March gains do little to reverse a slowing and unstable labor market

Today’s jobs report shows the labor market added 178,000 jobs in March, and February’s losses significantly revised down, revealing a decrease of 133,000 jobs. The unemployment rate remained mostly unchanged at 4.3%, with unemployment at its weakest pace since 2020. As hiring stalls, the share of workers who say it’s harder to find jobs has increased sharply, and the number of workers who have given up on the labor market entirely increased by 40% in the last month alone. Paychecks are stalling as prices rise from Trump’s war with Iran and continued uncertainty over his tariffs, squeezing Americans from all sides.

Groundwork’s Chief Economist Breyon Williams released the following statement:

“Beyond today’s headline bounce, the labor market continues to deteriorate under Trump’s economic mismanagement: hiring has ground to a halt, paychecks are shrinking, and workers are giving up on finding a job altogether. A single month of modest gains can’t reverse the damage that the president has inflicted on working families.”

BACKGROUND

• The March jobs report confirms a volatile labor market, as workers are at the whim of the president’s chaos. Job growth remains inconsistent, with modest gains following sharp losses in February. This extends a stop-and-start pattern with gains one month followed by losses the next that has persisted since last June.
  • In the first quarter of this year, just 68,000 jobs have been added per month on average. This represents one of the weakest first quarters of job growth outside of a recession since 2003.
  • The headline number overstates the health of the labor market as half of job gains were in the health care sector and driven by physicians returning from strike activity, a one-time bounce.
  • The share of consumers who say jobs are currently hard to get rose to 21.5% in March, the highest in more than five years, according to The Conference Board. The share expecting fewer jobs in the next six months also climbed, and the number of consumers expecting a recession in the next 12 months is up.
• Hiring has slowed to its weakest pace since 2020 as job openings vanish, leaving jobless workers out to dry. The number of marginally attached workers increased by 20% and discouraged workers by 40% in a single month.
  • The latest Job Openings and Labor Turnover Survey (JOLTS) data show the hiring rate fell to 3.1% in February. Job openings dropped to 6.9 million from 7.2 million the month before.
  • As the job market slumps, it’s taking workers longer to find a job: the average duration of unemployment spells is nearly four months and has increased by nearly 19% over the past year.
  • For workers just entering the labor market, finding work is even more challenging: Entry-level job postings have dried up, leaving a generation of young workers locked out of careers before they can start.
• Paychecks are stalling as inflation heats up. Average weekly earnings ticked slightly down in March as hourly earnings were roughly flat but hours declined. Shrinking paychecks will make the price hikes caused by Trump’s war on Iran even more painful for families who are already struggling to keep up.