Total nonfarm payroll rose by 178,000 jobs in March and the unemployment rate dropped to 4.3%, according to the U.S. Bureau of Labor Statistics — but these headline numbers hide evidence of a job market remaining still, economists said.
The gains beat expectations, though February numbers were revised further down by 41,000 jobs to a loss of 133,000, “unusually large swings,” Andrew Flowers, chief economist at Appcast said in a statement. This “choppy trend” may obscure “baseline conditions of a low-hire, low-fire labor market,” he continued.
Laura Ullrich, director of economic research for the Indeed Hiring Lab, noted that the rhythm of the job market “hasn’t been about job losses or gains. It’s been about stillness.”
“The result is a labor market that has essentially adopted a defensive posture, and March’s numbers, while stronger than expected, don’t suggest that posture is changing,” Ullrich continued.
For example, the unemployment rate dropped, but that may be in part because the labor force participation rate also fell, hitting below 62% for the first time since November 2021, per Nicole Bachaud, a labor economist for ZipRecruiter.
“This report uncovers the bigger challenges that lie ahead: a shrinking workforce,” Bachaud said in a statement.
Immigration is dropping as well as native-born worker participation, with fewer workers willing to brave long stints of unemployment.
“An increase in job opportunities could bring many of these would-be workers back to the market, but it might not be enough to counteract the impacts of both shrinking immigration and an aging workforce,” Bachaud said.
