First Friday: Jobs Are Up. So Why Does the Economy Feel Worse?
Afford Anything Podcast Recap
Published:
Duration: 40 min
Summary
Despite the addition of 178,000 jobs in March 2026, the economy continues to feel unstable due to high job cuts in the tech and transportation sectors and increased gas prices. The episode examines these contradictions and their impact on the economy.
What Happened
The U.S. economy witnessed the addition of 178,000 jobs in March 2026, with significant growth in healthcare, construction, and warehousing. However, federal government jobs saw a decline. The unemployment rate is holding steady at 4.3%, and average hourly earnings rose by 0.2% over the year, marking a 3.5% increase that surpasses inflation.
Despite job growth, other economic indicators paint a less optimistic picture. The Challenger Gray and Christmas report revealed over 60,000 job cuts in March 2026, marking a 25% increase from the previous month. The tech sector faced substantial layoffs, including significant cuts from Dell, Oracle, and Meta, contributing to a feeling of economic uncertainty.
Transportation sector layoffs reached record highs due to the ongoing conflict in Iran, impacting global supply chains and employment. Conversely, the automotive industry led hiring efforts with plans for 12,000 new positions, followed by Entertainment and Leisure with 8,000 new jobs.
The Federal Reserve maintained the federal funds rate between 3.5% and 3.75% while adjusting its GDP growth forecast for 2026 to 2.4% with a predicted inflation rate of 2.7%. Mortgage rates remain high, with the average 30-year rate at 6.44%, influenced by a 10-year Treasury yield of 4.32%.
In March 2026, US oil futures surged by 51%, marking the largest one-month gain since 1983. This dramatic rise has driven gas prices above $4 per gallon and diesel to around $5.50 per gallon, straining consumer budgets.
A new proposal from the Department of Labor intends to allow 401k plans to include alternative assets. This proposal would require fiduciaries to evaluate multiple factors such as performance fees and liquidity, potentially broadening investment options for retirement savings.
Vicki Robin, co-author of 'Your Money or Your Life', published an article on Substack with allegations of abuse, creating significant waves in the FIRE (Financial Independence, Retire Early) community. The book, a foundational work for the movement, has sold over a million copies and spent over five years on the BusinessWeek bestseller list.
Federal student loan management is undergoing a transition from the Department of Education to the Treasury Department, starting with defaulted borrowers. This shift affects around 10 million people and involves approximately $180 million in loans. The elimination of the SAVE Plan will impact about 7 million borrowers, who will need to switch to new repayment plans by July 1st.
Key Insights
- In March 2026, the U.S. economy added 178,000 jobs, with significant contributions from healthcare, construction, and warehousing sectors, while federal government jobs declined.
- Despite job growth, the economy feels unstable due to a high number of layoffs, especially in the tech and transportation sectors. The tech sector alone announced 18,720 job cuts, largely from companies like Dell, Oracle, and Meta.
- US oil futures experienced a 51% increase in March 2026, leading to gas prices exceeding $4 per gallon. This surge marks the largest one-month gain since 1983, heavily impacting consumer expenses.
- The Department of Labor's new proposal could expand 401k investment options by allowing alternative assets. This change would require fiduciaries to consider aspects like performance fees and liquidity.