Unemployment Rate Falls to 4.3% as Economy Adds 178,000 Jobs in Surprise Rebound

Defying forecasts, the U.S. unemployment rate decreased to 4.3% in March, down from 4.4% the month before, as a solid bounce-back in payrolls suggested the labor market remains resilient.

The much stronger-than-expected report from the Bureau of Labor Statistics released Friday showed that nonfarm payrolls grew by 178,000 jobs last month.

The segments of the job market that saw the biggest gains in March included health care (+76,000), construction (+26,000), and transportation and warehousing (+21,000), but federal government employment continued on its downward path.

Since reaching a peak in October 2024, federal government employment is down by 355,000, or nearly 12%, with an additional 18,000 jobs lost in March.

Employment in the financial activities sector contracted by 15,000 payrolls in March, bringing the total decline to 77,000 since its May 2025 peak.

Other major industries—including mining, oil and gas extraction; manufacturing; retail, and leisure and hospitality—saw little month-over-month change in employment.

"Today was a Good Friday for the job market, but we are far from out of the woods when it comes to the economic outlook," says Realtor.com® senior economist Jake Krimmel.

The March release reflects steep revisions to the start of the year: February was revised down by 41,000 jobs, from -92,000 to -133,000, meaning last month was worse than initially thought, while January was revised up by 34,000, from +126,000 to +160,000.

On balance, these adjustments reveal that employment for the two-month period was 7,000 lower than previously estimated.

Krimmel also points out that much of March's survey window predates the worst of the economic disruption related to the war in Iran, so the surprise rebound may not hold up.

"Despite an uncertain economic outlook, the labor market continues to show resilience, even if the line between stabilizing and stagnating remains thin," says Krimmel

What it means for the spring housing market

The March numbers mean the Federal Reserve and those watching the broader economic outlook can breathe a small yet meaningful sigh of relief today.

According to Krimmel, the stagflation scenario that had been building over the past few weeks now looks less threatening.

"Wage growth came in soft at 3.5% year over year, and although that doesn't do much for consumer buying power, it does let the Fed keep its eye squarely on inflation," says the economist. "Monetary policy looks well positioned to wait, so expect the Fed to remain on extended pause."

For housing, the report renews hope heading into April after a volatile March. Construction had a strong employment month, a potential indicator for housing supply and demand as the season ramps up.

"The broader labor market picture won't boost consumer confidence much, but it probably won't make it worse either," says Krimmel. "This is extremely important, given mortgage rates have risen for five straight weeks and are now pushing 6.5%."

Despite potential headwinds, the spring housing market has not been derailed yet, with pending sales and new listings posting year-over-year gains.

"Today's jobs report does not change the fundamental challenges facing buyers and sellers, namely affordability and broader uncertainty, but given the volatility of the past month, we will take this small win," concludes Krimmel.