US job growth jumps in March despite Iran war

US job growth beats expectations in March as employers add 178,000 positions, unemployment dips to 4.3%, signaling resilience despite uncertainty over the Iran war and rising energy prices that are weighing on the outlook.

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The U.S. labor market delivered an unexpected boost in March, adding 178,000 jobs despite economic uncertainty linked to the ongoing Iran conflict and rising energy prices.

Data released by the U.S. Department of Labor showed the unemployment rate edged down to 4.3%, signaling continued resilience in hiring even as geopolitical tensions weigh on business sentiment.

The stronger-than-expected gains were partly driven by a rebound in the healthcare sector following the end of strikes that had dampened February’s employment figures. Job growth also extended into construction and manufacturing, indicating broader momentum across key industries.

However, some sectors faced setbacks. Financial services, information industries — including tech, film, and publishing — as well as government employment reported declines during the month.

The latest figures are likely to reinforce the Federal Reserve’s cautious stance, which has resisted calls to cut interest rates. Donald Trump has repeatedly urged policymakers to lower borrowing costs to stimulate growth, but officials remain wary of inflation risks, which continue to hover above the central bank’s 2% target.

Fed Chair Jerome Powell has described the economy as being in a “delicate balance,” with slower job creation but no significant surge in layoffs.

Economists say the unfolding conflict involving Iran could further complicate the outlook, particularly through higher oil prices. Rising energy costs risk feeding into transport and food prices, potentially squeezing household spending and slowing broader economic activity.

“The question now is how much blowback will come from the war in Iran and the associated uncertainty around energy prices,” said Olu Sonola, head of U.S. economics at Fitch Ratings.

While March’s report points to underlying strength, analysts caution that hiring has been uneven over the past year, reflecting ongoing business uncertainty. With geopolitical risks mounting, many expect the Federal Reserve to maintain a wait-and-see approach in the months ahead.