Nonfarm payrolls are expected to bounce back — barely — in March as the bar keeps getting lower for what constitutes a healthy labor market.

The U.S. economy is projected to show job gains of 59,000 for the month, an anemic rate by the standards of previous years this decade but enough to keep the unemployment rate at 4.4%.

If the estimate is reasonably accurate, it actually would represent above-trend job growth for a labor market that has created virtually no jobs over the past year.

Immigration restrictions, shifting demographics and geopolitical uncertainty have left companies eager neither to hire nor fire workers en masse, resulting in a static labor market and a series of ho-hum monthly counts from the Bureau of Labor Statistics. The BLS will release the number Friday at 8:30 a.m. ET, though the stock market will be closed in observance of the Good Friday holiday.

“We have to revise our idea of what a good or bad job number is,” said Guy Berger, chief economist at Homebase, which provides workforce management services for small businesses.

A report like February’s showing job losses “would have been raising alarm bells about the state of the labor market,” he added. “Now we’re like, yeah, that was a very bad report, but it doesn’t freak anybody out about the job market. I didn’t look at that report and say, wow, we’re on the verge of tipping into recession.”

Echoing views expressed by Federal Reserve Chair Jerome Powell and other central bankers, Berger said he’s more focused on the unemployment rate as a gauge of labor market stability.

In a recent report, the St. Louis Fed updated previous research on the breakeven level for job growth. The bank’s economists now think that number could be as low as 15,000, with a high end of 87,000.

That’s a steep drop from an estimate as recent as April 2025 that showed the breakeven level at 153,000, and an update in August of that year putting the number between 32,000 to 82,000.

In other words, the labor market needs nowhere near the job growth it required previously to keep the population near full employment.

“Things have been slowly getting worse each for the last few years,” Berger said, but added, “There’s no real sign of us tipping into a recession.”

Some economists on Wall Street disagree. Goldman Sachs, Moody’s Analytics and others in recent days have raised their odds of recession in the next 12 months, with a focus on threats from a slowing jobs picture and surging energy costs.

Earlier this week, BLS data showed that the rate of hiring as a share of the workforce fell to 3.1%, its lowest level since the Covid recession in 2020 and, before that, January 2011.

Still, Homebase’s data is consistent with other indicators, including the ADP private payrolls report for March, showing modest gains in payrolls. February’s loss of 92,000 jobs came in part due to a since-resolved strike at health-care provider Kaiser Permanente that sidelined some 31,000 workers in California and Hawaii.

Federal Reserve Chair Jerome Powell, in a wide-ranging talk at Harvard University, said Monday that he sees inflation expectations as grounded despite rising energy prices so the central bank doesn’t need to respond with higher interest rates.

As his term leading the central bank nears an end, Powell avoided questions about the longer-term direction of interest rates or inclinations his designated successor has espoused.

In the near term, he said the proper move is to look beyond the short-term gyrations of the energy market and focus on the Fed’s goals of stable prices and low unemployment.

“Inflation expectations do appear to be well anchored beyond the short term, but nonetheless, it’s something we will eventually maybe face the question of what to do here,” he said during a question-and-answer question with a moderator and students. “We’re not really facing it yet, because we don’t know what the economic effects will be, but we’ll certainly be mindful of that broader context when we make that decision.”

As he has in the past, Powell said he believes the current rate target, in a range between 3.5%-3.75%, is “a good place” for the Fed to sit as it observes events currently playing out, including the Iran war and the impact tariffs are having on prices.

The comments appeared to register in financial markets, with traders no longer pricing in a significant chance of a rate hike this year. As recently as Friday morning, markets were looking at a better than 50% probability of a quarter percentage point increase amid expectations the Fed would react to the surge in energy costs. However, odds of a hike by December fell to 2.2% after Powell’s appearance.

Powell said raising rates now could have negative effects on the economy later. He noted that Fed rate moves have a lagged impact on the economy, so tightening here wouldn’t help the inflationary impact of the Iran war.

“By the time the effects of a tightening in monetary policy take effect, the oil price shock is probably long gone, and you’re weighing on the economy at a time when it’s not appropriate. So the tendency is to look through any kind of a supply shock,” he added.

Market-based measures such as breakeven rates in Treasury yields indicate few fears of an inflation spike. Breakevens measure the difference between Treasurys inflation-indexed securities. The five-year breakeven rate most recently was around 2.56% and trending lower over the past 10 days.

Powell’s term ends in mid-May, and President Donald Trump has nominated former Governor Kevin Warsh as the next chair. However, Warsh’s nomination is being held up in the Senate Banking Committee as U.S. Attorney Jeanine Pirro continues her investigation into renovations at Fed headquarters.

Though a judge threw out a subpoena Pirro’s office issued to Powell, she has appealed the decision. While the case is being adjudicated, Sen. Thom Tillis, R-N.C., has vowed to prevent the nomination from going through.

For his part, Warsh has stated a preference for lower interest rates than the current level. Asked to comment on his successor’s plans, Powell said, “I’m not going to swing at that pitch.”

Regarding private credit, Powell noted rising defaults, investor withdrawals and concerns about wider issues in the $3 trillion sector.

“I’m reluctant to say anything that suggests that we’re dismissive of the risk, but we’re looking for connections to the banking system and things that might result in contagion. We don’t see those right now,” he said. “What we see is a correction going on, and certainly there’ll be people losing money and things like that. But it doesn’t seem to have the makings of a broader systemic event.”

Federal Reserve Governor Stephen Miran on Monday continued his campaign for lower interest rates, telling CNBC that policymakers should disregard the current energy price spike unless there are signs it will have longer-lasting impacts.

“If I saw a wage-price spiral, or I saw evidence that inflation expectations are starting to pick up, then I would get worried about it,” he said during a “Squawk on the Street” interview. “There’s no evidence of it thus far, and you can move the monetary policy rate all you want — today tomorrow — but it’s not going to affect inflation the next couple of months.”

Citing market-based indicators, Miran said inflation expectations remain well anchored, despite the jump in oil to more than $100 a barrel and a price shock at the pump that has pushed gasoline higher by more than $1 a gallon.

Monetary policy works with a lag and isn’t geared toward short-term market gyrations, he added.

Miran has dissented at each of the meetings he has attended since September 2025. He told CNBC that he continues to think “we could be about a point easier, gradually done over the course of a year.”

The fed funds rate is currently targeted in a range between 3.5%-3.75%. Market pricing is implying no moves in either direction before the end of the year.

Miran’s term has expired, but he continues to serve as the nomination of former Federal Reserve Governor Kevin Warsh is held up in the Senate Banking Committee. If confirmed, Warsh will take over as chair for Jerome Powell when the latter’s term expires in May.

Federal Reserve Chair Jerome Powell last week pushed back when asked whether stagflation posed a threat to the U.S. economy. His successor may face a tougher challenge, as Wall Street forecasters raise their expectations of recession, brought on in part by the Iran war and potential for higher prices.

In recent days, economists have pulled up their risk assessments of a U.S. contraction amid heightened uncertainty over geopolitical risk and a labor market that for the past year has shown strains over the past year.

Moody’s Analytics’ model has raised its recession outlook for the next 12 months to 48.6%. Goldman Sachs boosted its estimate to 30%. Wilmington Trust has the odds at 45%, while EY Parthenon has it at 40%, with the caveat that “those odds could rapidly rise in the event of a more prolonged or severe Middle East conflict.”

In normal times, the risk for a recession in any given 12-months span is around 20%. So while the current predictions are hardly certainties, they signify elevated risk.

The situation poses a tough challenge for policymakers who are being asked to balance threats to the labor market against sticky inflation.

“I’m concerned recession risks are uncomfortably high and on the rise,” said Mark Zandi, chief economist at Moody’s Analytics. “Recession is a real threat here.”

Talk of an economic contraction has accelerated as the war with Iran has dragged on.

An oil shock has preceded virtually every recession the U.S. has seen since the Great Depression, save for the Covid pandemic. Prices at the pump have risen by $1.02 a gallon over the past month, an increase of 35%, according to AAA.

While economists still debate the pass-through impact from higher energy, the trend has held.

“The negative consequences of higher oil prices happen first and fast,” Zandi said. “If oil prices stay kind of where they are through Memorial Day, certainly through the end of the second quarter, that’ll push us into recession.”

Like his fellow forecasters, Zandi said his “baseline” expectation is that the warring sides find a diplomatic off-ramp, oil flows again through the Strait of Hormuz and the economy can avoid a worst-case scenario.

To be sure, economists as a lot are negative and subject to the old trope about predicting nine of the last five recessions. Markets also have been wrong about where the economy is headed. A portion of the yield curve — or the spread between various Treasury maturities — most closely watched by the Fed has sent repeated false recession signals for much of the past 3½ years.

But the threat of a prolonged war, pressure on a consumer who drives more than two-thirds of all growth, and a labor market that created virtually no jobs in 2025 collectively raises the risk that the expansion could falter.

“That path through is increasingly narrow, and it’s getting increasingly difficult to see the other side,” Zandi said.

Consumers also are pessimistic. Consumer site NerdWallet said its March survey showed 65% of respondents expect a recession in the next 12 months, up 6 percentage points from the month before.

Beyond energy prices, economists say the labor market is a key pressure point.

The U.S. economy created just 116,000 jobs for all of 2025 and lost 92,000 in February. While the unemployment rate has held steady at 4.4%, that’s largely been because of a dearth of firing rather than a burst in hiring.

Indeed, stocks have had a rough ride during the war. The Dow Jones Industrial Average has fallen more than 5% during the hostilities — important because consumer spending and sentiment have been supported by higher-income households benefiting most from rising equity prices.

Gross domestic product is on track to grow at a 2% pace in the first quarter, according to the Atlanta Fed’s GDPNow tracker of rolling data. However, that’s coming off an increase of just 0.7% in the fourth quarter, the product in part of the government shutdown. Economists had expected that the drain on growth in Q4 would translate to a boost in Q1, but the effects of that appear to be modest.

Still, if global leaders can find an end to the war soon, the economy again is expected to skirt the gloomiest predictions. Stimulus from the One Big Beautiful Bill in 2025 is projected to goose growth, with lower regulations and a boost in tax returns that could help consumers cope with elevated prices. A sustained rise in production also is a factor in the economy’s favor.

“There is support underneath,” said North, the Allianz economist. “That makes me real hesitant to use the ‘R’ word. But certainly, I think we’re seeing a slowdown this year.”

Wholesale prices rose sharply in February, providing another sign that inflation continues to percolate even aside from rising energy costs.

The producer price index, a measure of pipeline costs that producers receive for their products, increased a seasonally adjusted 0.7% on the month, the Bureau of Labor Statistics reported Wednesday. Excluding volatile food and energy costs, the so-called core PPI increased 0.5%.

Economists surveyed by Dow Jones had been looking for increases of 0.3% for both measures.

For the all-items index, prices rose faster than the 0.5% pace in January. However, the core increase was less than the 0.8% for the prior month.

On a 12-month basis, headline PPI inflation was at 3.4%, the most since February 2025, while core was at 3.9%, according to the BLS. The Federal Reserve targets inflation at 2%.

Stock market futures slipped following the report while Treasury yields were higher. Futures traders pushed out the next Fed interest rate cut until at least December.

The surge in PPI came due in large part to a 0.5% increase in services costs, something the Fed would not welcome. Policymakers have attributed much of the recent run-up in inflation to tariffs, which would not show up as much on the services end. Portfolio management fees, a key driver for services costs within the PPI measurement, were up 1% in February. Similarly, prices for securities brokerage, dealing, investment advice and related services accelerated 4.2%.

Goods prices rose 1.1% on the month.

Food prices rose 2.4% while energy was up 2.3%. Within food, the index for fresh and dry vegetables soared 48.9%.

The report suggests that pipeline inflation pressures remain persistent, particularly on the services side, complicating the Fed’s path as it weighs how long to keep interest rates elevated.

The report comes with inflation worries accelerating amid the fighting in the Middle East. The U.S. and Israel continue to strike at targets in Iran, causing energy prices to surge. Oil has been trading around $100 a barrel, up more than 70% year to date as the conflict has proceeded.

None of the inflation data so far has captured the price increases associated with the war. But it has indicated that even before the attacks, inflation was a problem. A report last week indicated that consumer prices rose at a 2.4% rate in February. Separately, the Commerce Department said its main inflation gauge, which the Fed uses as its forecasting tool, was at 3.1% for core and 2.8% for headline.

Later Wednesday, the Fed will release its latest interest rate decision. Market participants consider it a near certainty that central bankers will vote to keep their benchmark overnight interest rate anchored in a range between 3.5%-3.75%, where it has been since the last cut in December 2025.

Sen. Tim Scott on Wednesday said he hopes the federal investigation into Federal Reserve Chair Jerome Powell “goes away” so the Senate can take up the nomination of Kevin Warsh, President Donald Trump’s pick to replace the head of the U.S. central bank.

“That proceeding going away allows for us to get the Fed fully functioning, back on target,” Scott, who chairs the Senate Banking, Housing and Urban Affairs Committee, said during an appearance on CNBC’s “Squawk Box.”

Sen. Thom Tillis, R-N.C., has vowed to hold up any Fed nominees until a federal criminal investigation into Powell is resolved. Trump floated the idea of firing Powell last year and lashed out at the Fed chair for refusing to cut interest rates to the extent he desired. Powell has denied any wrongdoing and has said he is being targeted for refusing to accede to Trump’s demands.

Powell was expected to testify before Congress on Feb. 11, but missed that date because of the federal probe, Scott said.

“I had a conversation with Jay about his testimony,” Scott said. “I recommended that he come before the committee.”

“At this point he is more concerned about the criminal proceeding ,” he said. “And I get that.”

The Fed did not immediately respond to a request for comment.

Tillis is otherwise supportive of Warsh, who Trump nominated for the role in January, but doubled down on his blockade after meeting with the Fed nominee on Tuesday.

“This is not about people, it’s about process,” Tillis said. “I think this is a foul.”

“This is about this is bedrock principle of Fed independence,” Tillis told reporters Tuesday. “I have no earthly idea what the market reaction would have been if suddenly the perception is that the Fed chair serves at the pleasure of the president.”

Sen. Kevin Cramer, R-N.D., another Banking committee member, told CNBC earlier Wednesday he sees no reason why some Democrats won’t support Warsh’s nomination.

“There’s really no reason by anything from he’s ever said or that he’s done that, that Democrats shouldn’t support his nomination,” Cramer, who was scheduled to meet with Warsh on Wednesday, said. “They’re going to be rigorous, of course, in their interviewing of him and and the cross examination … when his hearing takes place. But I think we should be on track to get him across the finish line so that there’s no gap between … the end of Jay Powell’s term and the beginning of the new term.”

The investigation into Powell is in part based on testimony Powell gave to the Senate Banking committee last year. Scott has said in the past that he did not believe Powell committed a crime in his testimony, sentiment he repeated Wednesday. He said the Senate would begin confirmation hearings for Warsh “as soon as possible.”

“At the end of the day … when he was before the committee he definitely was unprepared,” Scott said of Powell. “I think he was woefully unprepared. But he did not commit a criminal act when he was before the committee.”

President Donald Trump on Wednesday officially nominated Kevin Warsh to be the next chairman of the Federal Reserve.

Warsh, if confirmed by the Senate, would replace Fed Chairman Jerome Powell, for a four-year term.

Trump’s nomination was transmitted to the Senate, the White House said in a statement posted online on Wednesday.

That transmittal came more than a month after Trump first publicly announced he wanted Warsh as the Fed chairman.

Sen. Thom Tillis, a North Carolina Republican, has said he would block Warsh’s nomination from proceeding in the Senate until a federal criminal investigation of Powell by the U.S. Attorney’s Office in Washington, D.C., is dropped.

Tillis’ stance could prevent the nomination from being considered by the full Senate.

Powell said in mid-January that he was under investigation in connection with the $2.5 billion renovation of the Federal Reserve’s headquarters in Washington, and his testimony about that project to the Senate.

The chair also said that “the threat of criminal charges” against him is directly due to him and other Fed governors refusing to bow to Trump and his demands that they cut interest rates more quickly than the president has demanded.

Last summer, Trump tried to fire Fed Governor Lisa Cook, who sided with Powell on interest rate decisions. Trump, at the time, cited an allegation by a housing official he had picked that Cook had committed mortgage fraud, but his move to terminate her was seen as motivated by his ire over her stance on interest rates.

Cook, who has denied any wrongdoing, has remained on the Fed pending the outcome of a lawsuit against Trump challenging her removal.

The Supreme Court in January heard oral arguments in that case. The court has yet to issue a ruling on whether Trump can fire Cook.

American consumers and businesses are taking most of the hit from President Donald Trump’s tariffs, New York Federal Reserve President John Williams said Tuesday in remarks that counter White House claims.

“The tariffs have overwhelmingly been borne domestically — a New York Fed analysis estimates that most of the burden has fallen on U.S. firms and consumers.,” Williams said in remarks for a conference in Washington, D.C. “In addition, the tariffs have already meaningfully increased U.S. prices of imported goods, and the full effects have likely not yet been felt.”

The study Williams cited has generated a fair amount of controversy over the past few weeks.

In a white paper published on the New York Fed’s website, a team of researchers found that as much as 90% of the added cost from tariffs has been passed on to domestic producers and consumers. Trump and other White House officials had insisted that exporters would absorb the costs rather than raise prices.

National Economic Council Director Kevin Hassett flamed the controversy during a CNBC appearance in which he suggested that the researchers should be “disciplined” for what he termed was “the worst paper I’ve ever seen in the history of the Federal Reserve system.” Hassett later stepped back the criticism.

Addressing the issue for the first time publicly, Williams said not only were the tariffs being felt at home, but they also were keeping the Fed from reaching its 2% inflation goal.

“My current estimate is that, to date, the increase in tariffs has contributed around one half to three quarters of a percentage point to the current inflation rate of about 3 percent,” he said. “The FOMC defines price stability as 2 percent inflation over the longer run. Owing to the effects of tariffs, progress toward that goal has temporarily stalled.”

On the bright side, Williams said he still expects the tariff impact on inflation to be temporary, and he sees the Fed hitting its target by 2027. He added that the U.S. economy “appears to be on a good footing.”

As for current policy, he said it is “well positioned” for the Fed to hit its dual mandate goal of steady prices and full employment. Should inflation progress lower after the tariff impact fades, “further reductions in the federal funds rate will eventually be warranted to prevent monetary policy from inadvertently becoming more restrictive.”

Markets expect the Fed to resume cutting later this year, possibly in July or September, according to current futures pricing. As New York Fed president, Williams carries extra influence on the Federal Open Market Committee, where he is a permanent voting member.

Chicago Federal Reserve President Austan Goolsbee said Tuesday that interest rate cuts aren’t appropriate until there’s more evidence that inflation is on its way down.

With recent indicators showing that inflation well off its highs but still above the Fed’s 2% target, Goolsbee noted that policymakers “have been burned by assuming transitory inflation” in the past and shouldn’t make the same mistake again.

“I feel that front-loading too many rate cuts is not prudent in that circumstance,” he said in remarks before the National Association for Business Economics at its annual gathering in Washington, D.C. “People express that prices are one of their most pressing concerns. Let’s pay attention. Before we cut rates more to stimulate the economy, let’s be sure inflation is heading back to 2%.”

The most recent inflation data, for December, showed core inflation, which excludes volatile food and energy prices, running at 3%, as measured by the consumption expenditures price index, the Fed’s primary forecasting gauge. That was up 0.2 percentage point from November and came somewhat due to tariffs, which are viewed as temporary, but also from underlying pressures in the service sector and areas not directly impacted by the duties.

Specifically, Goolsbee said stubbornly high housing inflation isn’t tariff driven, emphasizing the need for the Fed to be “vigilant.”

Goolsbee noted that a 3% inflation rate “is not good enough — and it’s not what we promised when the Federal Reserve committed to the 2% target. Stalling out at 3% is not a safe place to be for a myriad of reasons we know all too well.” He has said previously that he thinks the Fed will be able to cut later in the year.

The remarks come with markets expecting the Federal Open Market Committee, of which Goolsbee is a voter this year, to stay on hold until at least June and probably July. Futures traders are placing about a 50-50 chance of a cut in June and about a 71% probability of a July cut, according to the CME Group’s FedWatch gauge. The Fed enacted three quarter-percentage-point cuts in the latter part of 2025.

Fed Governor Christopher Waller, who has been an advocate for lower rates, took a more measured approach Monday while also speaking to the NABE conference.

Though Waller said he thinks policymakers should “look through” tariff impacts, he said recent data show the labor market may be in better shape than previously indicated, mitigating the need for further cuts. If the jobs picture continues to improve, that would further lessen the case for cuts, though he said he isn’t convinced that the January nonfarm payrolls data wasn’t “more noise than signal.”

Tuesday will be an active day Fed speakers, with Governor Lisa Cook also due to present to the NABE later in the morning.