Zürcher Nachrichten - US registers strong job growth in boost to Trump

The world's largest economy gained 178,000 jobs in March, after losing 133,000 in February, and the unemployment rate dropped by 0.1 percentage-points to 4.3 percent, the Labor Department said.

Friday's data significantly beat analyst expectations, with economists polled by Dow Jones Newswires and the Wall Street Journal expecting an increase of 59,000 jobs.

The data was stronger than forecast, "but vastly overstates the sustainable pace of job growth," said Oxford Economics lead US economist Nancy Vanden Houten.

"The end of a strike, seasonal quirks and a rebound after harsh winter weather likely boosted job growth in some sectors," she said.

The White House, however, touted the numbers as a major success.

"Americans can rest assured that after the short-term disruptions of Operation Epic Fury are behind us, America's economic resurgence is set to only accelerate," said spokesperson Kush Desai, referring to the US-Israel war on Iran.

- Health care recovery -

Much of March's recovery was fueled by health care jobs, which have remained resilient even as labor demand has dropped in other sectors.

Health care added 76,000 jobs in March, after having lost jobs the month before, in part due to strike actions.

Employment in construction also grew by 26,000 in March, although the Labor Department flagged that it had changed little over its level from a year ago.

Federal government employment continued to decline, down 11.8 percent since October 2024. Trump has taken a hatchet to the sector in a drive aimed at cost-cutting and reducing the size of government.

The new data reflected a revision in the figures for January and February, showing employment for those two months combined was 7,000 lower than previously reported.

- 'Look through the noise' -

The US-Israel war on Iran has engulfed the Middle East, sent oil prices surging and snarled supply chains, leading to fears of a global economic slowdown.

Analysts signaled caution as the economic impact of the war begins to hit Americans.

Nationwide Chief Economist Kathy Bostjancic said the March report showed the labor market was in "good standing," with "broad-based gains in the private sector."

Oxford Economics' Houten, however, said the report "doesn't change our assessment that the downside risks to the labor market have increased" due to the war.

"As the labor market softens due to the fallout from the war, we expect the unemployment rate to edge up," she said.

High energy prices tend to drive up production costs, curbing economic activity, with analysts expecting the current "low-hire, low-fire" trend to continue.

"If you look through the noise you have, you know that same picture that we've been looking at, which is a labor market that's holding up, but that has become more fragile, and that remains stuck in this low-hire, low-fire type of environment," EY-Parthenon Senior Economist Lydia Boussour told AFP.

- Fed fallout -

Uncertainty about the war's economic shock has so far led policymakers at the Federal Reserve to adopt a wait-and-see approach on interest rate moves, as they balance curbing stubbornly high inflation with managing unemployment.

Unemployment rates have remained relatively steady in the United States -- but the figure has hidden churn under the surface, analysts warn, as weak jobs growth has been matched by a drop in labor supply.

That drop in supply is largely attributed to Trump's crackdown on migrants.

For Fed policymakers, however, inflation currently appears to be a bigger risk than unemployment.

"We are getting mixed signals, with some key indicators showing signs of steadying while others are suggesting a weakening labor market," said New York Fed President John Williams on Monday.

EY-Parthenon's Boussour said Friday's report will provide "a little bit of reassurance and a little bit of breathing room for the Fed to focus on the inflation side of their mandate in the coming months."

X.Blaser--NZN