The U.S. economy added three times as many jobs in March as most economists were expecting, and the unemployment rate edged down to its February level as the choppy, up-down-up pace of employment in recent months continued.
The Labor Department said today that the economy added 178,000 jobs in March — far exceeding the consensus estimate of 60,000 — and the unemployment rate also surprised by falling slightly, to 4.3%. It has been stable between 4% and 4.5% since the start of 2025.
The sizable advance in March was shown to be even more important for the economy because the government said February’s job loss was deeper, at 133,000, than the originally reported 92,000. And January’s six-digit gain was also revised, upward, from 126,000 to 160,000, making the gyrations within the three-month period even more pronounced.
The labor force participation rate — the percentage of the population that is in the workforce — fell to 61.9% in March and has been slowly declining since November, when it was at 62.5%. The declines may appear small, but the new rate is the lowest since 2021.
So is the economy healthier now, or is it lurching and struggling to gain its balance? And what does the uneven trend mean for the recreational boating industry as it moves into the spring selling season?
“Despite a string of headwinds, the U.S. labor market continues to outperform the downside scenarios that have dominated the forecast landscape,” Shawn DuBravac, chief economist at the National Marine Manufacturers Association, told Trade Only Today.
“While March’s headline of 178,000 jobs is striking, it masks a deeper trend: The economy has averaged roughly 21,000 new jobs per month over the past year,” he added. “The labor market is holding together structurally, with low layoffs keeping the unemployment rate in check, but hiring remains measured. Despite some volatility in recent months, the economy remains in a low-hire, low-fire environment that is likely to persist in the coming months.
“The recreational boating industry can be cautiously optimistic about the March jobs report,” DuBravac added. “The industry should view this report as confirmation that the labor market is not collapsing. A jobs report like this likely keeps recession fears from intensifying, which could buoy consumer sentiment and in turn make discretionary purchases more appealing.
“The most positive number in the report is probably the continued rise in hourly earnings. Average hourly earnings rose 0.2% in March and 3.5% over the year. Wage growth is slowing at the same time that inflation is picking up, but for now, wage growth still supports households, even if it has cooled. One more thing: Construction employment was essentially flat in 2025, and a rebound in this sector could lead to broader improvements in housing-adjacent and outdoor recreation spending.”
Former NMMA president Thom Dammrich told Trade Only Today that he sees an economy that continued to show resiliency in March.
“It is hard to discern any trend here, as the jobs numbers bounce up and down each month,” he said. “For the year, jobs growth is flat. The three-month average is 68,000 jobs gained per month.
“I think this is modestly positive news for the boating industry, but not a signal that we will see a surge in sales any time soon,” added Dammrich, now an advisor at Global Marine Business Advisors. “I would really like to see a jobs growth trend develop in the coming months.”
Brian Thompson, an investor and clinical professor of economics at DePaul University in Chicago, described the economy as “resilient but uneven.”
“The 178,000 jobs in March was a bit of a surprise — three times expectations — and it reinforces that the underlying foundation is more durable than people give it credit for,” Thompson told Trade Only Today. “There is certainly some division across the labor market in terms of areas showing stability, areas experiencing growth and areas facing more challenges. That unevenness creates the ‘choppy’ feel, but choppy does not mean unhealthy. We’re consistently generating above the threshold needed to keep the jobless rate steady, and that tells me the economy is finding its footing.
“For the boating industry, I do believe there are considerable business and growth opportunities ahead, but selectivity across market segments is important,” he added. “Rising energy prices tied to the situation in Iran are compressing disposable income for middle-market consumers already dealing with years of compounded inflation. That said, a stable labor market means people still have jobs and income, and that’s the foundation for big-ticket purchase decisions. The industry should plan with cautious optimism and meet consumers where they are.”
The health care sector — the economy’s main growth engine for more than a year — again led all categories with a gain of 76,000 jobs, buoyed by the return from a strike by workers at Kaiser Permanente in California and Hawaii.
In March, however, there were also significant gains in other sectors, as the construction industry added 26,000 jobs, and transportation and warehousing added 21,000 more. Social assistance employment was up by 14,000.
The leisure and hospitality category was not among the job creation leaders in March, but it is ramping up as the U.S. prepares to host the World Cup soccer tournament in June.
“We are in a health care economy,” Dammrich said. “Health care is 18% to 20% of the economy. We saw a big loss in health care jobs last month due to strikes, and a big gain in health care jobs this month because the strike is over. Unfortunately, most health care jobs are low-wage jobs.
“The most encouraging numbers are the increase in construction jobs and the increase in leisure and hospitality jobs,” he added. “This supports the increase in consumer confidence and strong consumer spending we have seen recently.
“The lack of bad news is good news. The premium end of the [boating] market is more stock-market-driven than jobs-driven. The entry-level and mid-level markets are more jobs-driven and should expect more of the same [results] — stable but not growing significantly.”
DuBravac pointed to health care’s 76,000 share of the March job total and noted that a significant portion reflected the return of roughly 31,000 Kaiser Permanente workers after their February strike.
“Construction added 26,000, likely boosted by warmer weather following a harsh winter,” he said. “Transportation and warehousing contributed another 21,000. The concentration of job gains remains narrow. Health care, construction, and transportation and warehousing drove the bulk of the improvement. Broad-based hiring across retail, manufacturing, leisure and hospitality, and information has not materialized.
“Also, the labor force shrank by 396,000 in March,” he added. “The unemployment rate fell to 4.3% in part because fewer people were looking for work. The report should be viewed with a measured perspective.”
Workers’ average hourly earnings continued to stay above the rate of inflation. The Labor Department said the increase for March was 9 cents, or 0.2%, to $37.38. On a year-over-year basis, the gain was 3.5%.
“I believe the wage growth numbers are the most significant positive [in the jobs report],” Thompson said. “When hourly earnings are growing at 3.5% annually and sitting above inflation, real wages are moving in the right direction. That’s critical for an industry that depends on discretionary spending. People don’t buy boats when they feel like they’re falling behind; they buy boats when they feel like they’re getting ahead.
“The unemployment rate dropping back to 4.3% also matters — confidence drives big-ticket purchases more than interest rates. A quarter-point difference in rates is less likely to dissuade someone from purchasing a boat. If anything, it would just affect the size of the boat or related options.
“For warning flags, I’d point to two things. First, rising gas and diesel prices act as a direct tax on consumers and raise the cost of boat ownership, hitting middle-market buyers hardest. Second, I’m watching the breadth of job creation closely. If gains remain concentrated in just a few sectors, the recovery isn’t as broad-based as the headline implies, and that has implications for consumer confidence across the board.”
The next meeting of the Federal Reserve’s policymaking committee is April 28-29. Fed chairman Jerome Powell has said that the central bank won’t approve any more rate cuts until it sees meaningful progress toward its 2% inflation target.
The next release of the Fed’s preferred inflation indicator, the Personal Consumption Expenditures Price Index, will occur next Thursday. The oil price shock caused by the Iran war has pushed average gasoline prices nationally above $4 a gallon, sparking fears that increases in the costs of delivering goods to market will rise, sparking higher inflation.
The Fed has been holding its benchmark interest rate steady because of the uncertain job market and inflation that has remained stubbornly above its goal rate. The strong March jobs numbers could cause the Fed to shift its focus to the inflation restraint side of its mandate.
Thompson said it’s difficult to make a strong argument that the Fed should lower its benchmark interest rate when energy prices are rising at the pace that they currently are.
“With 178,000 jobs and unemployment at 4.3%, the Fed has little reason to believe the labor market needs support,” he said. “The April 9 PCE release will be critical; if it shows inflation moving higher, which I expect, given gas and diesel [price] trends, the FOMC will feel increasingly comfortable signaling that inflation is now the primary concern.
“While it’s challenging to assess the Fed’s intentions from the outside looking in, it appears they are becoming more aligned around their policy direction,” he added. “We would need to see a considerable shift in labor markets to justify any rate change in April. The external headwinds and ongoing Middle East uncertainty make it difficult to stray from the status quo. My expectation is that the Fed holds steady and signals inflation is back atop the priority list. For the boating industry, that means the current rate environment is likely what we’ll be operating in through the summer selling season.”
NMMA’s DuBravac said he believes the Fed is not going to cut the federal funds rate at the April meeting and will keep the current rate for the remainder of the year. He said inflation does appear likely to reaccelerate “at least temporarily, due to higher energy prices, and the Fed could signal a more hawkish stance in the coming months.
“But I think they will balance a subdued labor market against the risk of accelerating inflation,” he added. “Dealers and manufacturers should plan around the assumption that borrowing costs stay where they are, and continue emphasizing flexible financing, entry-level product lines and shared-access models that lower the barrier to participation.”
Said Dammrich: “One month does not make a trend. However, I think this [strong jobs report] reduces the complexity of the Fed’s job. I think they will return to focusing on inflation, especially as expectations are for inflation to spike due to high energy costs. Let’s see what next month brings on the jobs front, and if we can get a growth trend going.”
