Unemployment Falls to 4.3% in March as Spring Housing Market Looks for Firmer Footing

A Stronger-Than-Expected Jobs Report, With Caveats

Today was a Good Friday for the job market, but we are far from out of the woods when it comes to the economic outlook. March’s Bureau of Labor Statistics employment report came in much stronger than expected, with 178,000 nonfarm payrolls added and the unemployment rate ticking down to 4.3%. However, there are a few important caveats. First, February was revised sharply lower to -133,000 net job growth, meaning last month was even worse than initially reported. And second, much of March’s survey window predates the worst of the war-related economic disruption, so March’s upside surprise may not hold up. Taking the two months together, the three-month rolling job growth average now sits at +68,000. Despite an uncertain economic outlook, the labor market continues to show resilience, even if the line between stabilizing and stagnating remains thin.

A Sigh of Relief for the Fed — and for Recession Fears

The Fed and those watching the broader economic outlook can breathe a small, but meaningful sigh of relief today. The stagflation scenario that had been building over the past few weeks now looks a little less threatening. Wage growth came in soft at 3.5% year over year, and although that doesn’t do much for consumer buying power, it does let the Fed keep its eye squarely on inflation. Monetary policy looks well positioned to wait, so expect the Fed to remain on extended pause. The three month job growth outlook to start 2026 is not robust, but it is likely enough to temper some of the recession fears that had been creeping into the conversation.

What It Means for Housing This Spring

For housing, the report renews some hope heading into April after a turbulent March. Construction added 26,000 jobs, a potential leading indicator for housing supply and demand as the season ramps up. The broader labor market picture won’t boost consumer confidence much, but it probably won’t make it worse either. This is extremely important given mortgage rates have risen for 5 straight weeks and are now pushing 6.5%. Despite potential headwinds, the spring housing market has not been derailed yet, with pending sales and new listings posting year over year gains. Today’s jobs report does not change the fundamental challenges facing buyers and sellers, namely affordability and broader uncertainty, but given the volatility of the past month, we will take this small win.

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