US employment growth likely rebounds in March, Middle East war casts shadow on labor market
A Reuters-based preview of the March U.S. employment report underscores growing macro risk from the Iran war and trade policy. Economists surveyed expected nonfarm payrolls to rise just 60,000 after a 92,000 drop in February, reflecting what they call "stall-speed" job growth amid elevated uncertainty. They cite President Trump’s aggressive tariffs—some struck down by the Supreme Court and then replaced with a time-limited global tariff—and a late‑February U.S.–Israeli strike campaign on Iran that has driven global oil prices up more than 50% and pushed U.S. gasoline above $4 per gallon. Analysts argue that last year’s hiring softness was tied to tariff uncertainty, and that the 2026 shock is now the combination of war and energy prices. Healthcare hiring is expected to rebound thanks to 31,000 Kaiser Permanente nurses returning from strike, with construction and leisure/hospitality also likely to bounce back from weather-related weakness. However, BLS JOLTS data show the largest drop in job openings in roughly 18 months, and mass deportations are cited as constraining labor supply and demand. JPMorgan economists warn that, given low underlying labor-force growth, negative payroll prints could appear about one-third of the time even without a recession. Looking ahead, several forecasters expect the Iran conflict’s drag on hiring to start showing in April–May data via weaker consumer demand from higher fuel costs and lower equity wealth (about $3.2 trillion wiped from markets in March). With the Fed holding its policy rate at 3.50–3.75% and recession odds repriced higher, the piece argues that the window for rate cuts in 2026 has narrowed, reinforcing a "low-hire, low-layoff" equilibrium that is fragile but, absent layoffs, might persist.
