U.S. job growth rebounded in March, with employers adding 178,000 nonfarm payrolls, according to data released Friday by the Labor Department’s Bureau of Labor Statistics. The unemployment rate declined to 4.3%, down from 4.4% in February.

The gain exceeded economists’ expectations, which had projected an increase of about 60,000 jobs following a revised decline of 133,000 in February. Estimates varied widely, reflecting uncertainty about the labor market’s direction amid shifting economic conditions.

The March increase was supported in part by the end of a healthcare worker strike and seasonal factors, including warmer weather. However, broader economic pressures continue to weigh on the outlook.

Ongoing geopolitical tensions, including the U.S.-Israel conflict with Iran, have driven oil prices significantly higher, contributing to rising fuel costs. National average gasoline prices have climbed above $4 per gallon, increasing inflationary pressure and reducing consumer purchasing power. Economists warn these factors could slow economic activity in the coming months.

Domestic policy changes have also contributed to uncertainty. Trade tensions and shifting tariff policies have complicated the business environment, while labor supply constraints—including immigration enforcement measures—have altered workforce dynamics. Some economists note that slower population growth means fewer jobs are needed each month to maintain stable unemployment levels.

Recent data has pointed to cooling labor demand, with job openings declining sharply in February. Analysts caution that while March’s report reflects stability, potential impacts from global conflict and economic disruptions may become more evident in the second quarter.

Financial markets have already reacted to the uncertainty, with significant volatility reported in recent weeks. Economists say the combination of higher energy costs and slower demand growth could limit future job gains and increase the likelihood of weaker monthly employment readings.

The Federal Reserve has kept its benchmark interest rate in the 3.50% to 3.75% range, and current labor market conditions are unlikely to prompt immediate changes. Expectations for rate cuts this year have diminished as policymakers assess inflation risks tied to energy prices and global instability.