Nonfarm payrolls are anticipated to recover — just slightly — in March as expectations continue to lower for what defines a healthy job market.
The U.S. economy is expected to report job increases of 59,000 for the month, a weak figure compared to earlier years this decade but sufficient to maintain the unemployment rate at 4.4%.
If the forecast holds true, it would signify above-average job growth for a labor market that has generated nearly no jobs over the past year.
Immigration limitations, shifting demographics, and geopolitical tensions have resulted in companies being neither inclined to hire nor terminate workers in large numbers, leading to a stagnant job market and a series of lackluster monthly reports from the Bureau of Labor Statistics. The BLS will disclose the figure Friday at 8:30 a.m. ET, although the stock market will be shut in recognition of the Good Friday holiday.
“We need to adjust our understanding of what constitutes a good or bad job number,” stated Guy Berger, chief economist at Homebase, which offers workforce management solutions for small enterprises.
A report like February’s indicating job losses “would have sparked alarm bells regarding the condition of the labor market,” he noted. “Now we acknowledge, yes, that was a very poor report, but it doesn’t panic anyone about the job market. I didn’t examine that report and think, wow, we’re about to slide into a recession.”
Unemployment rate in focus
Resonating the thoughts expressed by Federal Reserve Chair Jerome Powell and other central bankers, Berger said he is placing more emphasis on the unemployment rate as a measure of labor market resilience.
With the workforce evolving, increasingly smaller payroll increases are necessary to keep the jobless rate stable. The current unemployment rate of 4.4% is just 0.2 percentage points higher than it was a year ago, despite the disappointing payroll growth.
A recent report from the St. Louis Fed updated previous findings regarding the breakeven point for job growth. The bank’s economists now believe that figure could be as low as 15,000, reaching up to 87,000.
This marks a significant decrease from an estimate as recent as April 2025 that identified the breakeven threshold at 153,000, and an update in August of that year positioning the figure between 32,000 to 82,000.
In other terms, the job market does not require nearly the job growth it once did to maintain employment close to full capacity.
“Conditions have been gradually deteriorating over the past several years,” Berger remarked, but additionally noted, “There’s no definitive indication of us slipping into a recession.”
Some economists on Wall Street hold a differing view. Goldman Sachs, Moody’s Analytics, and others have recently increased their recession probabilities for the next year, citing concerns stemming from a weakening job outlook and rising energy expenses.
Earlier this week, BLS data revealed that the hiring rate as a fraction of the workforce fell to 3.1%, marking its lowest point since the Covid recession in 2020 and, prior to that, January 2011.
Gradual progression
Nonetheless, data from Homebase aligns with other metrics, including the ADP private payrolls report for March, which indicates modest payroll growth. February’s loss of 92,000 jobs was partly due to a strike at health-care provider Kaiser Permanente that temporarily affected around 31,000 workers in California and Hawaii, which has since been resolved.
The economy has heavily depended on the health care sector for employment growth. In fact, without this sector, the past year would have seen a net job loss of more than half a million positions.
ADP reported on Wednesday that private payrolls grew by 62,000, slightly exceeding market expectations, yet nearly all the growth came from healthcare, which added 58,000 jobs.
Even this figure concealed underlying weaknesses, stated ADP’s chief economist, Nela Richardson.
“Is that the economy that propels growth onward is the question, because many of these jobs are low-paying home health-care aide roles,” she remarked. “They aren’t the full-time, benefits-rich, 401(k) jobs that bolster consumer spending.”
EY-Parthenon is one of the Wall Street firms that have adjusted their recession predictions upward. Lydia Boussour, senior economist at EY-Parthenon, highlighted that health care “will be a significant aspect in the report.”
“We expect a largely stagnant job market in 2026, with selective hiring, limited wage growth, and strategic workforce adjustments as labor supply remains historically constrained,” Boussour stated in a note. “Risks are tilted to the downside considering the ongoing conflict in the Middle East, with recession probabilities at 40%.”
