U.S. employers added 178,000 jobs in March, and the unemployment rate fell to 4.3%, according to the Labor Department. The March gains followed a loss of 133,000 jobs in February, when hiring slowed to a six-year low with declines in the construction and leisure and hospitality sectors.

Job gains in March were driven by the health care industry, with additional employment growth in construction and manufacturing. Financial firms, the information sector — which includes film, publishing, and technology — and the government posted job losses during the month.

The Labor Department also revised January job gains upward, from 126,000 to 160,000. With revisions, however, total employment in January and February was 7,000 lower than previously reported. The Labor Department surveys employers and households around the middle of each month, and for March the survey took place a few weeks after the start of the Iran conflict.

"The question now is how much blowback will come from the war in Iran and the associated uncertainty around energy prices," said Olu Sonola, head of U.S. economics at Fitch Ratings. "For the Fed, wait-and-see is the only sensible option at this point," Sonola said.

The quits rate fell to 1.9%, the lowest level since 2020. Employers announced 217,362 job cuts in the first quarter of 2026, the lowest total for that period since 2022.

The White House implemented stricter immigration policies and introduced tariffs. Federal Reserve Chair Jerome Powell described the economy as being in a delicate balance, with muted job creation and relatively limited job cuts. The Federal Reserve has not cut interest rates in recent months due to concerns that inflation remains above its 2% target.

Inflation was steady at 2.4% since the start of 2026. Consumer inflation dipped to 2.3% in April 2025 and rose to 3% in September 2025.

U.S. average gasoline prices exceeded $4 per gallon in March. Oil prices rose sharply in 2022 following Russia's invasion of Ukraine, when average gasoline prices reached $5 per gallon and inflation hit 9% that year.

In 2025, the economy added 116,000 jobs for the entire year, a slower pace of employment growth that preceded the March gains.