Don’t Be Fooled by the Headlines — Economists Say March Jobs Report Is Hiding a Much Darker Story

When the US Labor Secretary stepped in front of cameras last Friday and declared that “America’s economic comeback is on full display,” it made for great soundbites. Major newspapers dutifully called the March jobs report “strong.” But if you looked even a little closer — as several economists did — the picture that emerged was a lot less cheerful.

What the Numbers Actually Show

The Bureau of Labor Statistics reported that employers added 178,000 jobs in March, with gains in construction, healthcare, and transportation, and declines in federal government employment. The unemployment rate edged down to 4.3%, with 7.2 million Americans officially out of work. On the surface, that sounds decent. But economists who study this for a living are urging people not to stop there.

“Folks, today’s jobs report is not good,” said Heidi Shierholz, president of the Economic Policy Institute, flatly and without hesitation.

The Two-Month Average Tells a Very Different Story

EPI senior economist Elise Gould pointed out that much of March’s gain was simply a bounce-back from steep February losses — a net loss of 133,000 jobs across both months. Average it out, and the economy added just 22,500 jobs per month over that stretch. The drop in unemployment? Also not what it seems. Gould explained that fewer people are counted as unemployed not because more people found work, but because more people stopped looking entirely. When workers give up on the job hunt, that paradoxically shows up as a lower unemployment rate.

The Federal Workforce Is Being Hollowed Out

Federal employment dropped 18,000 positions in March alone. Since January 2025, a staggering 352,000 federal jobs have been eliminated. These aren’t abstract numbers — federal workers keep vital services running, from food safety inspections to veterans’ benefits. Manufacturing added 15,000 jobs in March, but has still shed 82,000 positions since January 2025.

Workers’ Paychecks Are Shrinking in Real Terms

Wage growth has been slowing for months, hitting hardest for production and nonsupervisory workers — roughly the bottom 82% of the workforce. With oil prices surging from the ongoing war on Iran, real wages are almost certainly heading further downward. Slower paychecks plus rising fuel and consumer prices equals less purchasing power for working families.

The War’s Damage Hasn’t Even Shown Up Yet

Because the March data was collected mid-month, the economic fallout from the Iran war has barely registered. Economist Dean Baker was frank about it: “April could look considerably worse.” Americans are already feeling the pain at the pump — US families spent a collective extra $8.4 billion on gasoline in just the first month of the conflict, according to congressional economists.

The Bottom Line

The headline number sounds reassuring. But beneath it lies a labor market that is weakening, not strengthening. Workers are giving up, wages are losing ground to inflation, the federal workforce is being dismantled, and the true cost of an active military conflict hasn’t fully landed yet. The next few months of data will tell the real story — and economists are bracing for it to be considerably harder to spin.