US Labour Market Posts Largest Jobs Gain In 15 Months

• U.S. job growth rebounded more than expected in March as a strike by healthcare workers ended and temperatures warmed up, but downside risks for the labour market are mounting from a war with Iran that has no clear end in sight. The biggest increase in nonfarm payrolls in 15 months, ​and also the largest since President Donald Trump returned to the White House, followed a sharp decline in February, the Labour Department's closely watched employment report showed on Friday.
• Nonetheless, the rebound exaggerates the labour market's health. The ‌average workweek was shorter last month, and annual wage growth increased at its slowest pace in nearly five years. While the unemployment rate fell to 4.3% from 4.4% in February, that was because 396,000 people dropped out of the labour force, more than offsetting weakness in household employment. The labour force participation rate fell below 62% for the first time since the COVID-19 pandemic.
• Nonfarm payrolls increased by 178,000 jobs last month, the most since December 2024, after a downwardly revised 133,000 drop in February, the Labour Department's Bureau of Labour Statistics said. Economists polled by Reuters ​had forecast payrolls rising by 60,000 jobs after a previously reported 92,000 decrease in February.
• Estimates ranged from a loss of 25,000 positions to a gain of 125,000 jobs. The economy has experienced ⁠months of positive and negative payrolls since May last year, with volatility intensifying this year. Economists attributed some of the choppiness to the birth-death model, which the government uses to estimate how many jobs were gained or lost because of companies opening or closing in ​a given month. Others blamed uncertainty related to Trump's sweeping import tariffs, which have since been struck down by the U.S. Supreme Court. Trump, however, responded by imposing a global tariff for up to 150 days.
• March's employment report likely has no impact on the interest rate outlook, with the effects of supply chain disruptions from the conflict still to work their way through the economy. The odds of a rate cut this year have greatly diminished. The Federal Reserve left its benchmark overnight interest rate in the 3.50% to 3.75% range last month.

(Source: Reuters)