US March non-farm payrolls expected to increase by only 59k, significantly lowering the bar for good labor market data

Tong Hui Finance App News—— U.S. March nonfarm payroll employment data is set to be released soon. The market generally expects jobs to rebound only slightly, but the increase will be extremely limited, because the threshold used to judge whether the labor market is healthy is continuously moving downward.

The U.S. economy is expected to add 59k jobs in March. By the standards of this past decade earlier years, this figure looks quite weak, but it is still enough to keep the unemployment rate stable at 4.4%. A combination of factors—including immigration restrictions, changes in population demographics, and geopolitical uncertainty—has led companies to neither want to hire on a large scale nor to lay off on a large scale, resulting in a relatively stagnant labor market and a series of seemingly ordinary monthly employment data released by the U.S. Bureau of Labor Statistics.

The U.S. Bureau of Labor Statistics will release its March nonfarm employment report at 20:30 Beijing time this Friday (April 3). However, because it falls on Good Friday, the stock market will be closed that day.

The standard for whether employment data is “good or bad” has changed significantly

Guy Berger, chief economist at Homebase, which provides labor management services for small businesses, said: “We need to recalibrate how we perceive good and bad employment data.”

He added that reports showing job losses—such as those in February—used to “set off alarm bells about the state of the labor market” in the past. He further said: “Now we’ll only say, yes, this report is bad, but it won’t make anyone panic about the job market. When I saw that report, I didn’t think, wow, we’re about to fall into a recession.”

The unemployment rate has become the core indicator for judging labor market stability

Guy Berger noted that he pays more attention to the unemployment rate as an indicator for measuring labor market stability, a view that is highly consistent with what Federal Reserve Chair Powell and other central bank officials believe.

With profound changes in labor force structure, maintaining unemployment at a stable level now requires far less job growth. At present, the unemployment rate of 4.4% is only 0.2 percentage points higher than a year ago, despite extremely weak job growth data over the same period.

In a recent report, the Federal Reserve Bank of St. Louis updated its earlier research on the employment growth break-even point. The central bank’s economists currently think this figure could be as low as 15k, with a maximum no higher than 87k. This estimate is a significant drop from the 15.3 thousand figure in April 2025, and it is also below the range of 32k to 82k updated in August 2025.

In other words, the amount of job growth currently required to keep the labor market near full employment is far lower than in any other period in the past.

Guy Berger said: “In the past few years, things have been slowly worsening.” But he added: “However, there are not yet any clear signs of a true recession.”

Growing concerns among some firms on Wall Street about recession risk

However, some economists on Wall Street do not agree with this relatively optimistic assessment. Recently, institutions such as Goldman Sachs and Moody’s Analytics have raised their probability of a recession occurring over the next 12 months, focusing on threats arising from ongoing labor-market slowdown and a sharp rise in energy costs.

U.S. Bureau of Labor Statistics data released earlier this week showed that the hiring rate (the ratio of hiring to the labor force) has fallen to 3.1%, the lowest level since the 2020 COVID-19 recession. The last time there was a similar low point was in January 2011.

Employment growth relies heavily on healthcare, and the quality is worrying

Even so, Homebase’s data is broadly consistent with other indicators. This includes the ADP private-sector employment report, which showed a slight increase in jobs in March. In February, employment decreased by 92k jobs; part of the reason was a strike by Kaiser Permanente—California and Hawaii—affecting about 31k workers temporarily. The strike has now been resolved.

Over the past year, job growth in the U.S. has relied heavily on the healthcare industry. In fact, excluding the healthcare sector, the U.S. has seen a net decrease of more than 500k jobs over the past year.

ADP reported on Wednesday that private-sector jobs increased by 62k, slightly above market expectations. But nearly all of the growth came from the healthcare industry, which added 58k jobs.

Nela Richardson, chief economist at ADP, said that even this figure masks underlying weakness. She noted: “The issue is whether this is employment that can actually drive economic growth. Because many of these are low-paid home care assistant roles, rather than high-quality jobs that provide full-time work, full benefits, and 401(k) retirement plans—jobs that can effectively support consumer spending.”

EY-Parthenon is also one of the Wall Street institutions that has raised its recession outlook. Lydia Boussour, a senior economist at the firm, said: “Healthcare will be the focus of attention in this report.”

In a report, Lydia Boussour wrote: “We expect the labor market in 2026 to be essentially frozen. Companies will conduct selective hiring, slow wage growth, and make strategic adjustments to the workforce, because the supply of labor remains historically tight. With the conflict in the Middle East continuing, downside risks dominate. The probability of a recession is currently 40%.”

In summary, although March nonfarm employment data is expected to rebound slightly to 59k, this figure can no longer hide the reality that the overall U.S. labor market is weak. As the standards for “good jobs data” keep getting lowered, the unemployment rate is becoming a more important observation indicator. While the healthcare industry continues to contribute most of the newly added jobs, employment quality is a concern. Several Wall Street institutions have raised their assessment of recession risk in 2026 due to employment slowdown and rising energy costs.

As for where the future labor market will go, it still requires ongoing attention to subsequent economic data and the Federal Reserve’s policy signals.

(Editor: Wang Zhiqiang HF013)

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