US Nonfarm payrolls surge in March, unemployment drops

Key report from the US labor sector, released on Friday, showed much stronger than expected job growth, with nonfarm payrolls rising to 186K, following downwardly revised February figure (-129K from -86K) and more than doubling forecast for 70K increase.

The unemployment rate fell to 4.3% in March from 4.4% previous month and undershot 4.4% consensus.

Better than expected March numbers provide temporary relief to struggling US labor market, hurt by President Trump’s aggressive import tariffs and mass deportation of foreign workers, while negative impact from escalating conflict in the Middle East and soaring oil price, is still to hit the sector.

Drop in average earnings (m/m 0.2% Mar vs 0.4% Feb; y/y 4.3% Mar  vs 4.4%  Feb) adds to positive signals for the US central bank, as the data point to easing inflationary pressure, in the time when the Fed clinches with threats of fresh rise of prices, from rising cost of energy, which may cause a domino-effect on the entire economy.

Economists keep slight optimism following the latest encouraging data, but remain cautious about the overall situation, as more of war impact is likely be seen from reports in coming months.

They support their stance by the fact that gasoline price in the US topped $4 a gallon for the first time in more than three years, that is expected to boost inflation and erode households’ purchasing power and slow spending.

The central bank left its overnight interest rate unchanged and signaled that it will closely monitor the situation and act accordingly, with growing bets of potential rate hikes after initial plans for two rate cuts in 2026 have been sidelined.