US Job Growth Likely Rebounded in March Amid Uncertainty

Economists warn of downside risks to labor market from Middle East conflict

Apr. 3, 2026 at 10:11pm

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An extreme close-up aerial photograph of a repeating grid of office cubicles, with sharp focus and muted colors, conceptually representing the scale and interconnectedness of the U.S. labor market.As the U.S. labor market grapples with new geopolitical uncertainties, this abstract aerial view captures the vast scale and complexity of the nation's employment landscape.Boston Today

U.S. job growth likely rebounded in March as a healthcare worker strike ended and temperatures warmed up, but economists warn of mounting downside risks to the labor market from the dragging war in the Middle East. The anticipated bounce back will be a reversion to last year's near stall-speed growth pace, as the labor market has been buffeted by uncertainty around trade tariffs and now the conflict in the Middle East.

Why it matters

The monthly employment report is a closely watched economic indicator, and the rebound in March is expected to provide some relief after several months of weak job growth. However, economists caution that the ongoing Middle East conflict and resulting rise in oil prices could dampen the labor market in the coming months, posing a new challenge for the economy.

The details

The Bureau of Labor Statistics' employment report on Friday is likely to show nonfarm payrolls increased by 60,000 jobs last month, a rebound from a 92,000 job drop in February. The unemployment rate is forecast to hold steady at 4.4%, though some economists believe it could rise to 4.5%. The anticipated job growth is expected to be concentrated in a few industries like healthcare, construction, and leisure/hospitality, as the end of a healthcare worker strike and warmer weather boosted hiring. However, economists warn that the month-long conflict between the U.S., Israel, and Iran, which has sent oil prices soaring, could dampen labor demand in the coming months, similar to the impact of trade uncertainty last year.

  • The employment report will be released on Friday, April 3, 2026.
  • A healthcare worker strike ended in late February 2026, which is expected to boost March healthcare payrolls.
  • The U.S. and Israel launched strikes against Iran at the end of February 2026, sending global oil prices soaring.

The players

Sophia Kearney-Lederman

A senior economist at FHN Financial.

Ron Hetrick

A senior labor economist at Lightcast.

Brian Bethune

An economics professor at Boston College.

Andrew Husby

A senior economist at BNP Paribas Securities Corp.

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What they’re saying

“We saw this last year, uncertainty puts businesses on the back foot when it comes to hiring. Last year, the big uncertainty was around tariffs. This year, it's around what the conflict in the Middle East and rising oil prices will mean.”

— Sophia Kearney-Lederman, Senior Economist, FHN Financial

“Everything is just moving at a snail's pace, lots of uncertainty, and we are still deporting people.”

— Ron Hetrick, Senior Labor Economist, Lightcast

“Businesses are going to hunker down and go back in the bunker for a period of time. My guess is that period will likely be one or two months. So we will probably see that in April and May. The prospects for the second quarter are just not good.”

— Brian Bethune, Economics Professor, Boston College

“Absent a pickup in layoffs, we see the 'low-hire, low-layoff' equilibrium as uncomfortable but sustainable and one that doesn't call for pre-emptive Fed policy support.”

— Andrew Husby, Senior Economist, BNP Paribas Securities Corp.

What’s next

Economists will be closely watching the April and May employment reports to see if the impact of the Middle East conflict becomes more evident in the labor market.

The takeaway

The March employment report is expected to show a rebound in job growth, but the labor market faces new uncertainty from the escalating conflict in the Middle East and its impact on oil prices and the broader economy. Businesses may become more cautious about hiring in the coming months as they assess the fallout from the geopolitical tensions.