March Jobs Report Breakdown - 178,000 Added & What They're Not Telling You

The March BLS jobs report headline looks decent. The reality underneath it doesn't. In today's episode, host Pete Newsome breaks down what the mainstream coverage will gloss over: a shrinking labor force, surging discouraged workers, falling hours, and a February revision that turned an already soft month into an outright loss. If you want to actually understand what the job market is doing right now, this is the episode.

He also covers the NFIB March small business report, which confirms the same softening trend: falling hiring intentions, dropping compensation plans, and a hiring difficulty rate that refuses to budge despite a cooling market.

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Articles:
1. BLS Employment Situation Summary: https://www.bls.gov/news.release/empsit.nr0.htm
2. NFIB Small Business Employment Index: https://www.nfib.com/news/press-release/nfib-jobs-report-employment-index-pulls-back/

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Transcript

Welcome And Today’s Big Story

Pete Newsome 0:00

Welcome back to Cornering the Job Market. The big story today is the jobs report that was released this morning, so let's just get

March Jobs Report Headlines

Pete Newsome 0:05

right to it. The U.S. economy added 178,000 jobs in March. That's a big bounce back from February, which was a revised loss of 133,000. Yes, I said revised. I will talk about the revisions in just a minute. We're so used to those at this point, it's hardly news. The unemployment rate came in at 4.3%, which is slightly down from 4.4% the previous month. So slightly better trend there.

Labor Force Shrinks And Hours Cut

Pete Newsome 0:30

And on the surface, this looks good, but once you dig in a little deeper, as seems to be the case constantly lately, not so much, the number of employed Americans actually fell by 64,000 in March, and the labor force shrank by 396,000. And 488,000 more people moved out of the labor force entirely. Labor force participation slipped to 61.9%, which is down six-tenths of a point from a year ago when it was 62.5%. So how does unemployment go down when employment also goes down? People left the workforce. They stopped being counted. The unemployment rate improved in part because the denominator got smaller. The number of discouraged workers went up 144,000 in March to a total of 510,000, and the marginally attached jumped 325,000 to 1.9 million. Those are people who want work but have actively stopped looking. Now here's a stat you probably won't see reported anywhere else. Workers citing slack work or business conditions as the reason they're part-time jumped 269,000 in March to a total of 3.1 million. That means employers are cutting hours. And that is usually a precursor to cutting headcounts. So not a good sign at all seeing that. Workers with a bachelor's degree or higher saw unemployment fall to 2.8%, while workers without a high school diploma went in the opposite direction. Unemployment for them is now 5.9%. And I'm sure it doesn't feel like unemployment is trending in the right direction if you are on the job market right now, especially if you're a younger worker, but this is what the data is telling us. Now on the industry side, healthcare continues to lead the way. Healthcare added 76,000 jobs, but there's a caveat to that.2% to 37.38. Year-over-year wage growth is at 3.5%, but the average work week shrank to 34.2 hours. So take home pay isn't stretching the way that that percentage would suggest.

Revisions And Trusting The Data

Pete Newsome 3:15

Revisions, I said I'd talk about that. They're basically a wash, although always concerning to see because it makes us wonder whether we can trust these numbers at all. January was bumped up 34,000 to 160,000 jobs added. But February, which was already a bad number, was revised down by an additional 41,000 to get us to that negative 133. And the net change from the two months is 7,000 fewer jobs than previously reported. That's why I referred to that as a wash. So the headline number is going to get all the attention from this month because we added 178,000 jobs. I'm sure we'll see tweets from the White House and messages being delivered by the president and those who work for him as this being a really positive thing. But don't don't be fooled by that. Even if those numbers are real, we have real problems. The labor force is shrinking and hours are getting cut and discouraged workers are increasing. But I I I just don't feel good about this report at all. I mean look, it was it was an improvement of what was expected. Okay, we'll take that when again if we expect these numbers to hold. I don't. I I don't count the month until I see the next month and find out how it was revised. And in some cases, we have to wait two months or more. So look, feel how you want about this number. I will just take it as just kind of more of the same, which is really my description of the job market for over six months now. We're just not seeing any movement. Um, and that's what this this report feels

Small Business Hiring Signals

Pete Newsome 5:02

like to me. So let's move on to the next story. And this is about the small businesses. The NFIB released its March Jobs report yesterday, and the numbers confirm what the BLS data is suggesting. The small business employment index fell 1.9 points to 101.6. That's a meaningful single month drop. 52% of small business owners reported hiring or trying to hire in March, which is down two points from February. So that's a trend in the wrong direction. Of those trying to hire, 87% reported few or no qualified applicants, and 23% reported zero qualified applicants, which is up. I have to say it. I say it every every month when I talk about this report. If you're having a difficult time hiring, you have to look internally first. Are you not paying enough? Are you not going about it the right way? Recruiting and hiring is not easy. That's why in many cases these small businesses need to turn to a professional because they're probably not very good at it. So reach out to me. Maybe my company can help you, but I'd be happy to tell you how to find a great recruiting and staffing company to partner with because hiring should not be that challenging, certainly not in this market. Uh, but moving on, I'll get off that soapbox for now. Unfilled job openings in this report came in at 32%, which is down a point, but still above the historical average of 24%. The NFIB noted that openings are now at their lowest reading since the recovery from the COVID recession. So hiring's definitely going in the wrong direction there. Um the compensation date is where this report gets a little more interesting. A net 33% of owners reported raising compensation in March, which is down a point, but plans to raise compensation in the next three months dropped four points to a net 18%. That's the lowest reading since July 2025. I'll close on this with a quote directly from the NFIB. They wrote the economy is in okay shape, but a downturn is not out of the question. Stay tuned, things could change rapidly. That's a great way to close the week. Stay tuned. We'll see what changes in the near future. Hopefully, things for the better. But I'm not betting on that right now. We're gonna have to wait and see. Thank you for listening.

Fun Fact And Closing

Pete Newsome 7:13

Before we go, here's your fun fact procrastination is often an emotional regulation problem, not a time management one. Oh man. I wish I had a way to solve procrastination. I don't. Hopefully you do, and it's not a problem in your life, but certainly is for mine and has been for a very, very long time. So that is it. Really it for today. I will say goodbye now. Have a great weekend. Please like, subscribe, share with anyone who you think might be interested, and I will very much look forward to talking to you next week.