Research
April 03, 2026
Total U.S. jobs
U.S. job growth rebounded in March, but the labor market continues to soften overall
Nonfarm payrolls rose by a solid 178,000 in March, far exceeding expectations of roughly 60,000 and rebounding from a sharp decline in February. January and February data were also revised, with the net effect reducing payrolls in those two months by 7,000 relative to prior estimates. Despite the strength of the March gain, job growth has been uneven since last summer, with monthly gains swinging widely. On balance, the economy has added about 260,000 jobs over the past 12 months, a figure that, while positive, remains weaker than would be desirable given underlying labor market needs.
At the same time, the size of the civilian labor force has contracted significantly over the past year, down from 128.69 million in March 2025 to 123.84 million in March 2026. The labor force participation rate edged down from 62.0% in February to 61.9% in March, the lowest since November 2021. This suggests a sizable percentage of possible employees have moved to the sidelines of the labor market, which is a challenge.
The unemployment rate inched down for the second straight month, down from 4.4% in February to 4.3% in March. That has been the average since June. The number of unemployed individuals decreased from 7.58 million in February to 7.47 million in March, the lowest since July.
As can be seen above, these data provide mixed comfort, with signs of both resilience and softening in the labor market. Steady employment and wage growth have been essential drivers of consumer spending, and any sustained weakness could weigh on economic activity.
Restaurant operators are closely monitoring these labor trends as they work to drive traffic and sales against a backdrop of softer demand. While there are positive indicators that could support solid performance for the sector this year, risks remain, including a cooling labor market, higher energy costs, and heightened geopolitical uncertainties, among other factors.
Meanwhile, average hourly earnings for private‑sector production and nonsupervisory workers rose 0.2% to $32.07 in March, up 3.4% from a year earlier. It was the slowest pace of wage growth since May 2021. This is evidence of continued moderation, though at a still‑solid rate of wage growth. Labor cost pressures have eased markedly from their peaks of 7.8% in April 2020, in the immediate aftermath of the pandemic, and 7.0% in January and March 2022.
Job growth in March was largely positive, signifying a rebound from weaker February data. There was higher employment for private education and health services, leisure and hospitality (including for restaurants), trade, transportation and utilities, construction, and manufacturing, among others. Below is a detailed breakdown of March’s employment changes by sector, ranked from highest to lowest:
At the same time, the size of the civilian labor force has contracted significantly over the past year, down from 128.69 million in March 2025 to 123.84 million in March 2026. The labor force participation rate edged down from 62.0% in February to 61.9% in March, the lowest since November 2021. This suggests a sizable percentage of possible employees have moved to the sidelines of the labor market, which is a challenge.
The unemployment rate inched down for the second straight month, down from 4.4% in February to 4.3% in March. That has been the average since June. The number of unemployed individuals decreased from 7.58 million in February to 7.47 million in March, the lowest since July.
As can be seen above, these data provide mixed comfort, with signs of both resilience and softening in the labor market. Steady employment and wage growth have been essential drivers of consumer spending, and any sustained weakness could weigh on economic activity.
Restaurant operators are closely monitoring these labor trends as they work to drive traffic and sales against a backdrop of softer demand. While there are positive indicators that could support solid performance for the sector this year, risks remain, including a cooling labor market, higher energy costs, and heightened geopolitical uncertainties, among other factors.
Meanwhile, average hourly earnings for private‑sector production and nonsupervisory workers rose 0.2% to $32.07 in March, up 3.4% from a year earlier. It was the slowest pace of wage growth since May 2021. This is evidence of continued moderation, though at a still‑solid rate of wage growth. Labor cost pressures have eased markedly from their peaks of 7.8% in April 2020, in the immediate aftermath of the pandemic, and 7.0% in January and March 2022.
Job growth in March was largely positive, signifying a rebound from weaker February data. There was higher employment for private education and health services, leisure and hospitality (including for restaurants), trade, transportation and utilities, construction, and manufacturing, among others. Below is a detailed breakdown of March’s employment changes by sector, ranked from highest to lowest:
- Private education and health services: +91,000
- Leisure and hospitality: +44,000 (eating and drinking places: +21,500)
- Trade, transportation, and utilities: +33,000 (retail trade: +9,700)
- Construction: +26,000
- Manufacturing: +15,000
- Local government: +14,000
- Mining and logging: +2,000
- Professional and business services: +2,000
- Information: -3,000
- State government: -4,000
- Other services: -9,000
- Financial activities: -15,000
- Federal government: -18,000