United States: Job market fluctuates, in the context of perpetual instability

According to data released Friday by the US Department of Labor (BLS), the United States created 178,000 jobs in March after nearly destroying as many the previous month. The unemployment rate, meanwhile, slightly declined to 4.3%, almost reaching the same level as a year ago, falling within the full employment range. Market expectations were significantly lower for job creation, with the consensus published by MarketWatch aiming at around 59,000 positions.

“My economic policy has created an engine of enormous power that nothing can stop,” reacted Donald Trump on his Truth Social network. He mentioned job growth in construction, attributing it to his measures promoting industry relocation to the United States, even though the majority of job creation in March came from other sectors, particularly health and tourism.

Impact of geopolitical tensions

White House Deputy Spokesperson Kush Desai reiterated the administration’s stance that disruptions related to the Middle East war, triggered on February 28 by Israeli-American airstrikes on Iran, would be “temporary.” The conflict, leading to a spike in gas prices, is expected to increase companies’ production costs, somewhat discourage consumption, and weigh on growth and employment, according to economists.

In the meantime, BLS data has shown fluctuating trends in recent months. The February figures were shocking with 92,000 job losses reported. The updated data on Friday from the BLS was even more worrisome: 133,000 job losses.

The period was notably marked by a strike in healthcare, with temporarily absent workers not factored into the statistics. The end of the strike led to a correction, though it doesn’t explain the extent of the recovery. Jobs were also created in March in construction and logistics, as highlighted by the BLS.

A trend of slowing recruitment

“Taking a step back and looking beyond statistical volatility, the average job creation for February and March revolves around 23,000 monthly creations,” observed economist Lydia Boussour from EY-Parthenon. “It’s in line with what we’ve seen before: a labor market that remains resilient but has become more fragile,” continued Lydia Boussour.

For nearly a year, the American labor market has been widely described by experts as being in a state of “no hire, no fire” or “low hire, low fire” (little to no hiring, little to no layoffs). Companies, especially wary due to President Donald Trump’s tariffs and the recent war outbreak, refrain from hiring without significantly reducing their workforce.

Declining labor force participation

Another point to keep in mind, according to Lydia Boussour, is the dynamics at play in the labor force, which stagnates or declines amid aging and tough migration policies under the Trump administration. The BLS report shows that the labor force decreased by nearly 400,000 people between February and March. The labor force participation rate stands at 61.9%, “its lowest level since early 1977, excluding pandemics,” noted Lydia Boussour. With low demand for workers, tensions have not arisen yet, but it contributes to a “fragile balance,” added the economist.