The Bureau of Labor Statistics released the March jobs report, revealing that the U.S. economy added 178,000 jobs, surpassing economist expectations of a 60,000 job increase according to an LSEG poll [1]. Despite this strong hiring, wage gains lost momentum, with average earnings rising just 0.2% month-over-month and 3.5% year-over-year, both below the anticipated 0.3% and 3.7% increases respectively [1]. This slowdown in wage growth marks a deceleration from February, when wages were up 0.4% monthly and 3.8% annually [1].
The report also highlighted a decline in the average work week, which fell to 34.2 hours in March, below both the previous month's 34.3 hours and economist expectations [1]. The average hourly wage for private sector employees reached $37.38 in March, up from $37.29 in February and $36.11 in March 2025 [1]. Toro U.S. investment analyst Bret Kenwell described the jobs report as "encouraging" for the labor market, but pointed out that wage growth and hours worked were "a bit light," especially as rising energy prices are putting immediate pressure on consumers [1].
EY-Parthenon senior economist Lydia Boussour echoed concerns about the softer wage data, stating that "average hourly earnings lost momentum" and warning that rising gasoline prices are further squeezing disposable incomes and reducing household spending power [1]. Boussour emphasized that with labor market support already softer, the consumer outlook is "more fragile" [1]. She projected that in 2026, the labor market will likely be "largely frozen," with selective hiring, compressed wage growth, and strategic workforce resizing as labor supply remains historically strained [1].
CONCLUSION
While the March jobs report showed robust hiring, wage growth and hours worked fell short of expectations, raising concerns about consumer spending power amid rising energy prices. Economists warn that these softer labor market trends could lead to a more fragile consumer outlook and anticipate a stagnant labor market in 2026. The market impact is medium, as the data signals underlying weakness despite headline job gains.