Flash Report: March Unemployment Flows Suggest a Stable Labor Market
KEY TAKEAWAYS
- The headline U.S. unemployment rate rose to 4.2% in March from 4.1% in February. More precise data show the rate remained almost constant at 4.15% versus February’s 4.14%.
- This suggests employment conditions in the U.S. remained stable in March. Overall, they continue to be historically robust.
- Movements into and out of unemployment changed little in March compared with those in February.
This analysis focuses on how potential flows into and out of unemployment during March affected the overall unemployment rate.
Breaking the change in the unemployment rate into key components can offer a better sense of labor market conditions. (For information on this method, see Maximiliano Dvorkin and Serdar Ozkan’s St. Louis Fed On the Economy blog post “The Recent Ins and Outs of Unemployment: Using Flows to Study Labor Market Dynamics.”)
Data Highlights
While the headline unemployment rate increased to 4.2% in March, the unrounded rate ticked up a mere 1 basis point. The March jobless rate stayed in the narrow range—4.0% and 4.2%—observed since May 2024. (For more, see the Bureau of Labor Statistics’ Employment Situation release data in FRED.)
The numbers for people losing or leaving their jobs and becoming unemployed (job separations) and for unemployed people finding jobs were very close to their 12-month averages. (See the table below.) In fact, similar to the jobless rate, flows into and out of unemployment showed little change in March.
The exception was a moderate increase in the number of jobless workers who left the labor force (for example, discouraged job seekers), meaning they no longer appear in the unemployment rate. U.S. labor market conditions showed no further deterioration in March after the modest weakening in February (when the unemployment rate rose to 4.1% from 4.0% in January), and the overall picture remains positive.
| March 2025 | Last 3 Months | Last 12 Months | ||
|---|---|---|---|---|
| Average Monthly Change in Unemployment Rate (Percentage Points) | +0.01 | +0.02 | +0.02 | |
| Contribution of Job Flow Components to Average Monthly Change in Unemployment Rate (Percentage Points) | People Losing or Leaving Their Jobs and Becoming Unemployed | +0.96 | +0.94 | +0.95 |
| Unemployed People Finding Jobs | -1.08 | -1.07 | -1.06 | |
| People Previously Not in the Labor Force Who Are Now Seeking Work | +1.11 | +1.09 | +1.06 | |
| Unemployed Workers Leaving the Labor Force (e.g., Discouraged Workers) | -1.00 | -0.93 | -0.93 | |
| SOURCES: Bureau of Labor Statistics and Research staff’s calculations. | ||||
| NOTES: Data are seasonally adjusted. The overall change is based on the precise unemployment rate for these periods; for example, the unemployment rates were 4.15% in March and 4.14% in February. The flow components into and out of unemployment add up to the change in unemployment with a negligible residual. Again, see Maximiliano Dvorkin and Serdar Ozkan’s St. Louis Fed On the Economy blog post, “The Recent Ins and Outs of Unemployment: Using Flows to Study Labor Market Dynamics,” for more information about this method. | ||||
Citation
"Flash Report: March Unemployment Flows Suggest a Stable Labor Market," St. Louis Fed On the Economy, April 4, 2025.
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