US labor market rebounds

The latest data suggest February’s weak jobs report was largely weather- and strike-driven noise, with March showing a solid rebound in payrolls and broad-based hiring across key sectors. The labor market now looks close to full employment, while wage growth is cooling and productivity has improved, which together help contain underlying inflation pressures. At the same time, the Iran conflict and resulting spike in oil prices introduce a new inflation risk that could test both consumer resilience and corporate margins.

For now, futures markets imply the Federal Reserve is likely to stay on hold until there is more clarity on energy prices and growth momentum later this year. Advisors should weigh a still-firm labor backdrop against rising geopolitical risks and higher-for-longer energy costs when positioning portfolios for both inflation resilience and potential late-cycle volatility.