SUMMARY 1

The number of non-agricultural jobs is expected to increase by 60,000 in March. Economists believe it will take time for the oil shock to impact the job market. The unemployment rate is expected to remain at 4.4%. The growth in employment in the United States likely rebounded in March due to the end of a strike by healthcare workers and warmer temperatures. However, risks of deterioration in the job market are increasing due to the Middle East war.

Economists anticipate that the expected rebound will bring the job growth pace back to last year’s level, close to the slowdown speed. The job market has been shaken by uncertainty, starting with President Donald Trump’s aggressive tariffs. Although some clouds were clearing, the US Supreme Court reversed Mr. Trump’s tariffs in February, imposed under a national emergency law. However, Mr. Trump responded by imposing global tariffs for up to 150 days. In late February, the US and Israel launched strikes against Iran, causing global oil prices to increase by over 50% and domestic gasoline prices to rise.

Analysts stated that the month-long war added a new layer of uncertainty for businesses, leading to potential impacts on the job market in this quarter. The Bureau of Labor Statistics’ employment report is expected to show that non-agricultural jobs increased by 60,000 last month, following a 92,000 decrease in February.

The unemployment rate is predicted to remain at 4.4%, but some economists suggest it could reach 4.5%. The return to work of about 31,000 striking nurses at Kaiser Permanente in California and Hawaii at the end of February is expected to boost wage growth in the healthcare sector in March. The healthcare sector has been a key driver of employment growth, and economists expect it to remain so due to demographic changes.

An increase in employment is also expected in the construction sector, as well as in leisure and hospitality, after declines attributed to winter weather. Data from the BLS showed the largest drop in job openings in over a year and a half in February, indicating a decline in labor demand.

Historic low labor supply growth due to Trump administration deportations contributed to labor market paralysis, reducing supply and ultimately harming workers and demand for goods and services. Economists estimate that monthly job growth needs to be less than 50,000 to keep up with the working-age population’s growth.

Despite the early timing of March to capture Middle East conflict impacts, economists believe they may become evident in April’s employment report. Average gas prices exceeding $4 a gallon nationally for the first time in over three years could lead to inflation and reduced household purchasing power, offsetting wage growth.

The average hourly wage is expected to increase by 0.3% last month, translating to an annual wage increase of 3.7%. The war erased around $3.2 trillion from the stock market in March, and President Trump promised more aggressive strikes on Iran. The prospect of rate cuts this year has greatly diminished, as the Federal Reserve left its target rate unchanged last month.

The March employment report is not expected to impact interest rate outlooks as supply chain disruptions from the conflict have yet to fully affect the economy. The likelihood of rate cuts this year has significantly decreased, with analysts believing that the labor market balance does not require preemptive Fed support.