U.S. economy adds stronger-than-expected 178,000 jobs in March

By the numbers: The Bureau of Labor Statistics said on Friday that the economy shed 133,000 jobs in February, 41,000 more than initially reported. Jobs growth was held down by a health care strike and cold weather.January's figures were revised up to 160,000 from the 126,000 last estimated.Zoom in: Health care drove more than a third of March's gains, extending its run as the economy's main hiring engine.Health care added 76,000 jobs, roughly triple its monthly average over the past year as workers returned from a strike.Construction (+26,000) and transportation and warehousing (+21,000) also contributed job gains. Federal government employment fell by another 18,000, bringing cumulative job losses to 355,000 since its peak in Oct. 2024.What to watch: The Iran conflict has raised fresh inflationary concerns as an energy shock ripples across the global economy, creating a new tension for the Federal Reserve worried about the labor market that has whipsawed between job gains and losses for months. There's downside risk to the labor market, which suggests keep rates low, but there's upside risk to inflation, which suggests maybe don't keep rates low, Fed chair Powell — whose term expires next month — said earlier this week.The bottom line: The labor market held up in the early weeks of the Iran conflict. The big question is whether the resilience lasts as war-related shocks hang over the economy. Editor's note: This story has been updated with additional details.