The American labor market is surprising on the upside. According to the report published this Friday, April 3rd, by the Bureau of Labor Statistics (BLS), the US economy created 178,000 non-farm jobs in March 2026, a dramatic turnaround after the net loss of 133,000 jobs recorded in February – the worst month since the 2020 pandemic. The Dow Jones consensus had predicted only 59,000 creations.
The unemployment rate fell by one-tenth of a point to 4.3%, but this improvement is misleading: it is largely explained by a significant contraction in the labor force. In other words, many Americans have stopped looking for work and are no longer counted. The labor force participation rate dropped by 0.2 percentage points to 62.3%, its lowest level since September 2024.
On the wage front, growth remains moderate: average hourly earnings increased by only 0.2% for the month and 3.5% annually, the slowest annual rise since May 2021. For the Federal Reserve, these figures present a mixed signal – job creation is reassuring, but wage disinflation could argue for a faster-than-expected monetary easing.
The sectors that contributed most to the recovery are healthcare (+42,000), business services (+35,000), and public administration (+28,000). In contrast, the manufacturing sector continues to contract (–15,000 jobs), a sign that increased tariffs and supply chain disruptions linked to the Iranian conflict are weighing on American industry.
Markets reacted with caution: the S&P 500 opened up 0.4% before erasing its gains mid-session. 10-year bond yields fell by 3 basis points to 4.12%, with investors now betting at 65% on a Fed rate cut in June, compared to 52% the previous day.
