US Economy Adds 178,000 Jobs; Fed Holds Rates

Private payrolls grew by 186,000 jobs, surpassing the 70,000 economists predicted, though government payrolls contracted by 8,000. Key sectors like healthcare added 76,000 jobs, including 35,000 workers returning from a strike in physicians' offices, and manufacturing gained 15,000 jobs.

Conversely, the financial services sector shed 15,000 jobs, contributing to a 77,000 decline from its May 2025 peak. The number of long-term unemployed remained at 1.8 million, an increase of 322,000 over the year, accounting for 25.4% of all unemployed people.

Jeffrey Roach, chief economist for LPL Financial, noted that average hourly earnings rose 3.5% year-over-year, providing consumers sufficient buying power. This job market update gives the Federal Reserve more time to observe inflation before adjusting monetary policy.

The CME FedWatch tool indicates a 99.5% probability the Fed will maintain the federal funds rate at 3.5% to 3.75% at its April meeting, with a 78.9% chance rates remain unchanged through December.