So Far, 2026 Job Growth Is Better Than 2025 

As crazy as this may sound, the jobs data in 2026 has improved from the levels of 2025. That’s how low the bar was this year for growth and today’s jobs report reaffirmed that. Now, with a bar so low we can all trip over it, context is key.

Over the last six months of job creation, we averaged 15,000 jobs per month, but year-to-date, we are averaging 68,300 jobs per month. I know, I know, that doesn’t sound like a lot, but for the Federal Reserve, that is good enough to keep slowly heading toward neutral policy. With the Iran conflict still ongoing and inflation above target, this is the kind of jobs report that will keep the Fed on hold for now in terms of lowering the Fed funds rate while the conflict goes on.

So, let’s take a look at the jobs report.

From BLS: Total nonfarm payroll employment increased by 178,000 in March, and the unemployment rate changed little at 4.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in construction, and in transportation and warehousing. Federal government employment continued to decline.

We saw growth in multiple sectors, which is what you want to see in the jobs report, and which we haven’t seen over the past year. If we can get reports like this and still carry over 60,000 plus jobs per month, the Fed will be totally fine with the jobs data as long as jobless claims and the unemployment rate are low. Which means they won’t be cutting rates aggressively anytime soon.

Of course, as the labor force grows more slowly and fewer people are looking for work, the unemployment rate can stay lower for longer, even with job growth slower than in previous years. However, so far in 2026, job growth has been better than last year.

Key labor sector

One of the key recessionary labor data lines that I track with economic cycles — residential construction labor — picked up just a tad in this report, but is off the recent highs. However, as you can see, it’s not a clear breakdown lower as we have seen in other cycles, where it was very apparent. Usually if you are going into a recession, this sector tends to lose jobs aggressively, so it’s one I keep an eye on. 

Specialty contract labor data has also stopped declining.

So much of the job growth over the last year has come from healthcare and social assistance jobs that it’s nice to see a jobs report with some breadth. However, I need to see two things to take this trend seriously. No. 1: No big negative job revisions in the future. We didn’t see that in this report, which was good. No. 2: Growth in the construction and manufacturing sectors. If that can continue, it would be a plus and a divergence from the labor reports in 2025.

Conclusion

I know this jobs week felt different because of the conflict in Iran and all the world drama we are dealing with. In fact, on today’s episode of the HousingWire Daily podcast, I discuss whether higher oil prices could take us into a recession. But looking at today’s report, the jobless claims data is still very low, and the labor market isn’t breaking as it has in every other economic cycle we have witnessed post WWII.

So, for now, the labor data is doing slightly better in 2026 than in 2025, although the Iran conflict is taking control of the economic headlines these days.