US Job Growth Rebounds in March, But Risks Loom Amid Geopolitical Tensions

US job growth rebounded more strongly than expected in March, offering a temporary boost to the labour market after a weak February. However, economists warn that mounting geopolitical and policy risks could cloud the outlook in the coming months. According to data released Friday by the Labor Department’s Bureau of Labor Statistics (BLS), nonfarm payrolls rose by 178,000 jobs in March, reversing a downwardly revised decline of 133,000 in February. The rebound far exceeded economists’ expectations of a 60,000 increase, with forecasts ranging widely from a loss of 25,000 jobs to gains of up to 125,000. The unemployment rate edged down to 4.3% from 4.4% in February, signaling underlying resilience in the labour market. The improvement was partly driven by the end of a healthcare workers’ strike and seasonal factors such as warmer weather, which supported hiring. However, beneath the headline strength, warning signs are emerging. Labour demand has softened, with recent BLS data showing job openings fell sharply in February, the biggest drop in nearly 18 months. Economists said businesses remain cautious amid policy uncertainty and rising costs. A key source of concern is the ongoing US-Israel conflict with Iran, now in its second month. The war has pushed global oil prices up by more than 50%, sending domestic gasoline prices above $4 per gallon for the first time in over three years. Higher fuel costs are expected to feed into broader inflation, eroding household purchasing power and potentially dampening consumer spending. “The labour market is holding up for now, but the risks are clearly tilted to the downside,” economists said, noting that the full economic impact of the conflict is likely to emerge in the second quarter. President Donald Trump’s aggressive tariff measures, including a global tariff imposed after the Supreme Court struck down earlier duties, have unsettled businesses. At the same time, mass deportations have constrained labour supply, creating distortions that could ultimately weaken demand. With labour force growth already historically low, economists estimate that fewer than 50,000 new jobs per month are needed to keep pace with population growth, with some suggesting the break-even rate could be near zero or even negative.