作者：Wall Street CN

Behind a seemingly impressive jobs report lies a more unsettling issue.

The March non-farm payroll data released by the U.S. Department of Labor on April 4th superficially reassured the market—but the shadow of war and structural employment decline are making this comfort fragile.

March saw 178,000 new jobs added, the highest increase in nearly 15 months, reversing the revised decline of 133,000 in February. The unemployment rate also fell from its February high to 4.3%. The data brought a brief respite to the market.

However, the decline in the unemployment rate is not due to a surge in job opportunities. The reality is that nearly 400,000 Americans left the labor force last month.When jobs become increasingly difficult to find, people simply choose to give up.

Labor economist Guy Berger poured cold water on the idea, stating, "Nobody's talking about the job market accelerating again anymore."

Average figures reveal the true temperature

The large fluctuations in monthly data mask the true rhythm of the job market.

The average of February and March is combined.The average monthly increase in new jobs is only about 22,500 – this is a more realistic baseline.

The deeper crisis lies in the fact that the U.S. labor force participation rate fell to 61.9% in March, the lowest in nearly five years.If the impact of the pandemic is excluded, this figure even represents the lowest point since 1976 (when women began to enter the workforce in large numbers). Gus Faucher, chief economist at PNC Financial Services, points out that aging populations and recent restrictions on immigration are leading to a continued contraction in the labor supply.

Another noteworthy detail: the year-on-year wage growth for ordinary workers (non-management) has fallen to 3.5%, the lowest level in five years since the pandemic reopened. Slower wage growth suggests that consumer purchasing power is weakening.

The unhealthy balance of "low hiring, low layoffs"

The current US labor market presents a highly contradictory characteristic: there is a lack of incentive to hire, but companies are also unwilling to lay off employees.

Data shows that the healthcare industry was almost the sole hiring engine over the past year. Apart from healthcare, all other sectors of the economy have experienced job losses. In the past 12 months, the U.S. economy created only 327,000 jobs, a far cry from the usual 1 to 2 million.

“Hiring is at a low level, but so are layoffs,” explained Bill Adams, chief economist at Fifth Third Bank. The four-week moving average of initial jobless claims has fallen to 207,000, a historically low level. This state of “neither hiring nor laying off” is known among economists as the “low hiring-low layoffs” pattern, maintaining a delicate and fragile balance.

The Hormuz Shock: This Time It's Different

Over the past few years, the US job market has experienced a series of ups and downs, including aggressive interest rate hikes, regional banking crises, and tariff shocks, each time "bending but not breaking."

However, according to The Wall Street Journal, the impact of the war with Iran on the closure of the Strait of Hormuz is different in nature.

Economists at the Federal Reserve Bank of St. Louis estimate that if oil prices remain at current levels, the extra spending consumers make each quarter on fuel will offset 10% to 50% of the effects of Trump's tax cuts last year..

The logic is straightforward: for every dollar that flows to gas tanks, one less dollar flows to restaurants, retailers, and the service industry—which together constitute the majority of American employment.

Meanwhile, rising bond yields have pushed 30-year mortgage rates down from 6% to around 6.5%, dimming the prospects for a much-anticipated housing recovery and a boost to construction employment.

Consumer buffer is almost gone.

Consumers weathered the energy shock triggered by the 2022 Russia-Ukraine conflict thanks to the excess savings they had accumulated during the pandemic.

This time, the situation is different.

Citigroup's chief economist, Nathan Sheets, pointed out that consumer savings buffers have been largely exhausted, coupled with slowing wage growth, significantly reducing households' ability to absorb price increases. He said, "What could really break them is a significant deterioration in the job market."

Sheets likens the current job market to "an athlete in peak training"—years of absorbing shocks have made businesses leaner and more adaptable. But Skanda Amarnath, executive director of the economic policy think tank Employ America, offers a more cautious description, characterizing the current job market as "robustly soggy"—"long sluggish, but not yet collapsed."

Guy Berger stated bluntly, "2022, 2023, 2024, and 2025 made me realize that it's not impossible for things to continue to deteriorate at an extremely slow pace."

The Federal Reserve is in a dilemma.

The resilience of the job market has not made the Federal Reserve's situation any easier.

Before the war broke out, many Federal Reserve officials still expected interest rate cuts to resume this year. Now, more officials have indicated that interest rates may remain unchanged indefinitely.

In a blog post on April 4, San Francisco Federal Reserve President Mary Daly wrote, "It's not easy to communicate to the public that zero job growth is consistent with full employment." She also warned that the ceiling for economic growth has shifted downward, and the risks of misjudging interest rates as too high or too low are both increasing.

The core dilemma facing the Federal Reserve is that it has spent five years explaining to the public that "high inflation is temporary," and each new supply shock makes this narrative harder to maintain. If it maintains high interest rates to suppress inflation, the job market may be under pressure; if it cuts interest rates to protect jobs, inflation expectations may get out of control.

PGIM's chief global economist, Daleep Singh, outlined two scenarios: if a dignified ceasefire is reached, oil prices could fall back to $80 to $100 per barrel; if the conflict escalates, supply chain disruptions will drag down growth for far longer than the duration of the conflict itself, making it more difficult for the Federal Reserve to cushion the economic downturn through interest rate cuts.

The outcome will largely depend on how long the war lasts.