U.S. economy adds stronger-than-expected 178,000 jobs in March

Thehttps://www.axios.com/economy/labor-market" target="_blank"> labor market snapped back with 178,000 jobs added in March, while the unemployment rate ticked down to 4.3%, the government said Friday.

Why it matters: Hiring boomed after https://www.axios.com/2026/03/06/jobs-february-unemployment-trump" target="_blank">shedding jobs in February, suggesting a steadying labor market as thehttps://www.axios.com/world/iran" target="_blank"> Iran war injected fresh uncertainty into the economic outlook.

• The data captures the first full month of hiring since the Iran war began, offering an early read on how businesses are responding to the shock.
• The economy added nearly three times as many jobs as economists expected.

By the numbers: The Bureau of Labor Statistics said on Friday that the economy shed 133,000 jobs in February, 41,000 more than initially reported.

Jobs growth was held down by a health care strike and cold weather.

• January's figures were revised up to 160,000 from the 126,000 last estimated.

Zoom in: Health care drove more than a third of March's gains, extending its run as the economy's main hiring engine.

• Health care added 76,000 jobs, roughly triple its monthly average over the past year as workers returned from a strike.
• Construction (+26,000) and transportation and warehousing (+21,000) also contributed job gains.
• Federal government employment fell by another 18,000, bringing cumulative job losses to 355,000 since its peak in Oct. 2024.

What to watch: The Iran conflict has raised fresh inflationary concerns as an energy shock ripples across the global economy, creating a new tension for the Federal Reserve worried about the labor market that has whipsawed between job gains and losses for months.

• "There's downside risk to the labor market, which suggests keep rates low, but there's upside risk to inflation, which suggests maybe don't keep rates low," Fed chair Powell — whose term expires next month — https://www.axios.com/2026/03/30/powell-fed-iran-war-inflation" target="_blank">said earlier this week.

The bottom line: The labor market held up in the early weeks of the Iran conflict.

• The big question is whether the resilience lasts as war-related shocks hang over the economy.

Editor's note: This story has been updated with additional details.