U.S. economy adds 178K jobs in March, unemployment rate dips slightly to 4.3%

Summary

• The March jobs report showed a headline number of 178,000, significantly stronger than the 65,000 expectation.
• However, the previous two months were revised down by -133,000, with January's revision being particularly sharp.
• Key internals were soft: Average Hourly Earnings rose only 0.2%, missing the 0.3% forecast, marking the lightest monthly gain since last July.
• Year-over-year wage growth slowed to 3.5%, the lowest since May 2021, from a prior 3.8%.
• The Average Workweek dipped to 34.2 hours, a tenth less than expected and the previous month.
• The Unemployment Rate (U3) fell to 4.3%, a surprise drop from the expected 4.4%.
• The Labor Force Participation Rate slipped to 61.9%, matching November 2021 levels.
• The underemployment rate (U6) ticked up to 8.0% from 7.9%.
• Market reaction saw interest rates rise slightly (2-year from 3.81% to 3.85%, 10-year from 4.31% to ~4.35%) while equity futures fell.
• The report data is pre-conflict (referring to Iran tensions), so its relevance may be viewed as historical by some market participants.
• The overall takeaway is a mixed picture: a very solid headline jobs number contrasted with significant downward revisions and soft wage/hourly data.