A rebound in the jobs market after February’s weak showing and the threat of higher inflation are seen as keeping the Fed on hold.
- Analysts expect hiring to improve in March, with payrolls rising by 60,000 after February’s weaker-than-expected showing.
- March’s report is likely to reflect a persistent low-hire, low-fire labor market, with no significant change in the underlying economy.
- With a bounce in hiring, economists expect the Fed to maintain interest rates in their current range.
Economists forecast a rebound in hiring for the March employment report following a bleak showing in February, as the labor market continues to tread water. Analysts expect the March report to show 60,000 new jobs added, according to FactSet consensus estimates. Meanwhile, the unemployment rate is expected to tick higher.
In February, the US economy lost 92,000 jobs, far below economists’ forecasts. That reading was largely driven by strike activity in the healthcare sector, which has otherwise been a job growth juggernaut. The strike ended in late February, which economists say will likely lead to a snapback in overall hiring. The February report was also likely depressed by bad weather, economists say.
“In a lot of sectors of the economy, we’re seeing demand for workers at low levels,” says Vanguard senior economist Adam Schickling. “It’s been this low-hire, low-fire labor market.”
Against the backdrop of a relatively stable jobs market and the risks of higher inflation brought on by the spike in oil prices, analysts don’t expect the employment report to push the Federal Reserve to change interest rates in the coming months.
March Jobs Report Forecast Highlights
- Job report release date and time: Friday, April 3, at 8:30 a.m. EST.
- Total nonfarm payrolls are forecast to increase by 60,000 after falling by 92,000 in February, according to FactSet.
- The unemployment rate is expected to remain at 4.4%.
March’s jobs report is likely to show great improvement from February’s dismal numbers, largely thanks to a rebound in the healthcare sector as workers return from an early 2026 strike, economists say. In February, that sector lost 28,000 jobs, following a January gain of 77,000.
While economists have expressed concern about job growth being concentrated mainly in healthcare, Schickling doesn’t think it’s necessarily a cause for concern, since a disproportionately high portion of the US population is aging. “There’s going to be this structural demand for healthcare services that will continue to drive job growth,” he says.
Natixis chief economist Christopher Hodge expects hiring to be slightly lower than the consensus, at 45,000 new jobs in March. Sectors other than healthcare, including manufacturing and construction, continue to face uncertainty around trade policy and energy prices, which have skyrocketed since the start of the Iran war. “It’s a labor market that is trending worse rather than better,” he says.
Firms are likely reluctant to expand hiring due to mounting economic uncertainty around the future of tariff policy, oil prices, and the role of artificial intelligence in the workplace, Schickling says. Low hiring could create headwinds for young household spending, but he doesn’t think that’s inherently indicative of a weak economy, since they are likely to spend less than older households anyway. Rather, Schickling points to the low layoff rate as a healthy sign for the labor market: “The fact that the probability of losing your job in any given month remains historically low is still conducive to a healthy and resilient consumer in 2026.”
Unemployment Rate Seen Edging Higher
Economists expect the unemployment rate to edge higher in the March report to 4.5% from 4.4% in February. While the unemployment rate remains relatively stable, Schickling says the labor market continues to struggle on the hiring side, citing slow labor supply growth tied to the Trump administration’s restrictive immigration policy and other macroeconomic headwinds limiting firms’ willingness to create job openings—especially hurting young people entering the labor force. “Job growth is going to be challenging to find, because you can’t add jobs if you’re not adding workers,” he says.
Fed Rate Changes On Hold
Given the forecasts for a subdued jobs report, Schickling and Hodge both expect the Fed to hold interest rates steady at its end-of-month meeting. “The Fed is going to be in wait-and-see mode until they’re fairly confident about the impacts for inflation, or if the bottom falls out of the labor market,” says Hodge.
“As long as job losses remain low, the rising unemployment rate is less of an immediate concern to the state of the US economy,” says Schickling.
CME’s FedWatch tool, which shows bets placed by futures traders on the direction of interest rates, sees near-unanimous agreement that the federal-funds target rate will be kept in its current range of 3.50%-3.75% at the April meeting. That would be the fourth consecutive meeting with unchanged policy. It will be Jerome Powell’s final meeting as Fed chair.
