Need to Know Briefing | April 6, 2026: Jobs beat expectations. Hiring hit a 5-year low

Did the March Jobs Report Beat Expectations — or Just Look That Way?

March's jobs report came in well above forecasts, with the U.S. economy adding 178,000 jobs against economist expectations of just 59,000. Health care led all sectors, adding 76,000 jobs — a significant portion of which, 35,000, came from workers returning after a Kaiser Permanente strike in February. Construction added 26,000 and transportation and warehousing grew by 21,000.

The headline numbers look strong, but the underlying data tells a more cautious story. The unemployment rate dipped from 4.4% to 4.3%, but that decline was driven largely by 396,000 people leaving the labor force rather than more people finding work. The labor force participation rate fell to 61.9%, its lowest since November 2021. The three-month average stands at roughly 68,000 jobs, reflecting February's revised loss of 133,000.

Wage growth is also softening. Average hourly earnings rose just 0.2% in March, with year-over-year earnings growth at 3.5% — the slowest rate since May 2021, and just enough to keep pace with inflation. The average workweek fell 0.1 hour to 34.2 hours.

Federal employment continues its steady decline. The government shed another 18,000 jobs in March. Since reaching a peak in October 2024, federal employment is down 355,000 positions — a decline of 11.8%.

Read more via Bureau of Labor Statistics, The New York Times, CNBC

ADP Report: Private Sector Added 62,000 Jobs in March

According to ADP's National Employment Report, the U.S. private sector added 62,000 jobs in March, well below the BLS headline figure. The divergence is expected: ADP tracks only private sector data using a different methodology. Education and health services led ADP's count with 58,000 jobs added, while construction added 30,000. Manufacturing lost 11,000 and trade, transportation, and utilities declined by 58,000.

Regionally, the South drove March gains, adding 101,000 jobs, while the Northeast and Midwest both shed jobs. Small establishments — those with 1 to 19 employees — added 112,000 jobs, driving growth for the second consecutive month. Medium and large businesses both posted losses.

For job-stayers, pay growth held at 4.5% year-over-year for the third consecutive month. Pay growth for job-changers accelerated to 6.6%.

Read more via ADP

The Hiring Rate Just Hit a Five-Year Low

The latest JOLTS data from the Bureau of Labor Statistics shows a labor market that is, as Indeed Hiring Lab put it, "stuck in neutral." Total hires dropped to 4.8 million in February, down 498,000 from January and down 387,000 over the year. The hires rate fell to 3.1% — matching the low last seen in April 2020, at the start of the pandemic shutdown. The single-month drop from 3.4% to 3.1% was the largest one-month decline since 2016, outside of the pandemic.

Job openings came in at 6.9 million in February, down from a revised 7.2 million in January. The quits rate fell to 1.9%, the eighth consecutive month at or below 2.0% — a sign that workers are staying put rather than betting on something better. Layoffs and discharges held steady at 1.7 million.

The picture is one of a labor market that is neither expanding nor contracting in a meaningful way. The engine is running. It is just not going anywhere.

Read more via Bureau of Labor Statistics, Indeed Hiring Lab, Fortune

AI Is Now the Top Cited Reason for Job Cuts. Is That Actually True?

U.S. employers announced 60,620 job cuts in March, up 25% from February, according to Challenger, Gray & Christmas. For the first time in the report's history, AI was the single leading cited reason for cuts in a given month, accounting for 25% of March layoffs. Technology led all sectors in Q1 with 52,050 cuts, up 40% from the same period last year. Healthcare job cuts hit a record Q1 high of 23,520, and transportation cuts reached a record Q1 high of 32,241 — up 703% from the same period in 2025 — with airlines and shipping companies expected to face further pressure from the Iran conflict.

Read more via Challenger, Gray & Christmas

But economists and researchers are pushing back on the AI-as-culprit narrative. "AI washing" — the practice of attributing layoffs to AI when the real drivers are slower sales, overhiring, or routine cost-cutting — is becoming widespread. U.S. employers laid off more than 1.2 million workers in 2025, but Forrester estimates fewer than 100,000 of those losses were primarily driven by AI productivity gains. Glassdoor's chief economist says it remains "pretty hard to see evidence of AI impacting the labor market at the macro level," citing regulatory hurdles, cybersecurity requirements, and tool immaturity.

The incentive structure explains the pattern. Citing AI during layoffs can boost stock prices by signaling efficiency and innovation, and gives managers a ready-made explanation that deflects from more mundane business problems. Forrester projects 6.1% of U.S. jobs could eventually be lost to AI by 2030 — "bad but not an apocalypse."

Read more via The Wall Street Journal, CNBC, The New York Times

Hollywood's Job Market Has Collapsed — and There's No Clear Path Back

U.S. film and TV employment has fallen 30% from its late-2022 peak. Behind-the-scenes workers represented by the IATSE union worked 36% fewer hours in 2025 than in 2022, with many losing health insurance eligibility as a result. The number of newly started U.S. productions with budgets over $40 million dropped from 251 in 2021 to 159 in 2025, while the U.K., Canada, and Australia have grown their share of big-budget work through tax rebates that can cover nearly half of local production costs.

The streaming boom that drove "peak TV" has given way to a Wall Street-driven push for profitability. Viewers are spending more time on YouTube, TikTok, and Instagram content made with nonunion labor, and sports rights costs are crowding out entertainment budgets. AI adds further uncertainty: it could eliminate more production jobs, or it could spark a new content boom by making production cheaper.

Read more via The Wall Street Journal

H-1B Wage Requirements May Rise Significantly — and the FY2027 Cap Is Already Gone

The Labor Department published a proposed rule that would significantly increase the minimum pay employers must offer foreign workers on H-1B and related high-skilled visa programs. Under the proposal, entry-level wage minimums would jump from the 17th to the 34th wage percentile, with similar upward shifts across all four experience tiers. The DOL estimates the changes would raise the average certified wage by roughly $14,000 per year per worker, making it meaningfully more expensive to sponsor entry-level or early-career foreign workers.

The proposal revives a nearly identical rule from Trump's first term that was challenged in court and later dropped by the Biden administration. Existing approved certifications are not immediately affected — the new floors would apply only to new applications and those pending on the rule's effective date. Immigration attorneys are advising employers to review their current H-1B workforce now, consider proactively filing extensions, and assess which positions sit at wage levels most likely to be affected.

Separately, USCIS announced that the 85,000-visa annual cap for FY2027 has already been reached, completing the first H-1B lottery conducted under new Trump administration rules that weight selection toward higher-paid, more senior workers. The lottery comes as the administration simultaneously maintains a $100,000 fee for workers hired from outside the U.S. or requiring consular processing.

Read more via The Wall Street Journal, SHRM, Bloomberg Law, USCIS

Federal Contractors Now Required to Certify Abandonment of DEI Programs

President Trump signed an executive order directing all federal departments and agencies to insert a clause in their contracts requiring vendors to certify they will not engage in "racially discriminatory DEI activities." Agencies have until April 25 to add the clause to contracts and until July 24 to review compliance. Contractors who violate the clause risk contract cancellation, and the attorney general has been directed to consider False Claims Act charges against non-compliant vendors.

The order is the latest in a series of DEI-related actions from the Trump administration, which has largely survived legal challenges. In February, a federal appeals court vacated an injunction that had temporarily blocked earlier DEI executive orders. Separately, EEOC chair Andrea Lucas recently warned the entire Fortune 500 against DEI-based discrimination, signaling the agency intends to actively pursue private sector DEI programs as a basis for discrimination claims.

A recent Littler Mendelson survey found DEI was the single top workplace policy concern among employers after Trump's first year, cited at more than double the rate of AI.

Read more via HR Dive, The White House

Are Bitcoin-Funded 401(k)s Coming?

A Labor Department proposal would make it easier for retirement plan managers to offer workers access to alternative assets — including cryptocurrencies and private equity funds — that have historically been available only to wealthy individuals and institutional investors. The rule would cover roughly 721,000 retirement plans holding more than $8.8 trillion in assets for about 118 million workers.

The proposed rule would grant safe harbor protections to fiduciaries who follow a thorough, documented process when considering alternative assets. Supporters argue private market investments can improve long-term returns and diversification. Critics, including Senator Elizabeth Warren, say the assets carry higher fees, limited liquidity, and greater risk for everyday retirement savers. The DOL will open a 60-day public comment period before deciding whether to finalize.

Read more via The Washington Post, Reuters

How a Company Handles Layoffs Is Now a Public Event

Nearly 70% of workers have shared or would consider sharing negative layoff experiences on platforms like LinkedIn, Glassdoor, or Reddit, according to a new Careerminds survey of 500 HR leaders and 500 employees. The report describes this dynamic as a "reputational aftershock" that can shape how candidates, employees, and customers view a company long after the cuts.

The data for employers is sobering: 39% of employees said layoffs negatively affected their perception of their employer, 40% of HR leaders reported increased voluntary turnover following layoffs, and more than 1 in 5 employees said they were unlikely to stay after layoffs occur. And 57% of HR leaders said their organization is likely to conduct layoffs in the next 12 months. Yet only 45% of organizations included outplacement or career transition services in their offboarding process. Employees said they most wanted more transparent communication (63%), earlier notice (58%), and better career transition support (53%).

Read more via Careerminds

Work Is Getting Less Fun — and Employees Are Noticing

A combination of perk cuts, AI anxiety, and relentless efficiency drives is draining the joy out of office life, according to a new Wall Street Journal report. CFOs at large U.S. companies mentioned "efficiency" on 307 conference calls in the latest quarter — up from 219 a year earlier and the highest level since at least 2020, according to AlphaSense. The average manager now oversees roughly 12 direct reports, a nearly 50% jump from 2013, according to Gallup, as AI has raised productivity expectations while teams have grown.

AI anxiety is compounding the general malaise. As one longtime software marketer put it: "Everyone I talked to is consumed by AI, either how to use it, how to pretend to use it, how much they hate using it, how it's going to eliminate their position." Executives are beginning to acknowledge the risk of going too far. "You can cut too far or make people feel less valued in the workplace and they'll just go work for the competition," said one CFO.

Read more via Gallup, The Wall Street Journal

Nursing Has Become One of the Most Reliable Paths to the Middle Class

As AI anxiety and white-collar hiring slowdowns rattle workers in tech, finance, and consulting, healthcare and nursing are standing out as a stable, well-paying alternative. Healthcare was the largest source of U.S. job creation last year, and the Labor Department projects employment of advanced-degree nurses will grow 35% from 2024 to 2034 — far outpacing the 3% projected growth across all occupations.

The median annual wage for registered nurses is $93,600, more than double the $49,500 median for all occupations. Nurse practitioners earn a median of $132,050, and some specialties like nurse anesthesia can exceed $200,000. A University of Chicago analysis found that from 1980 through 2022, healthcare worker earnings rose significantly faster than for non-healthcare workers, with gains distributed broadly across income levels. Among nurses planning to leave the profession within five years, 41% cite stress and burnout as a primary reason — so the path is real, but not frictionless.

Read more via The Wall Street Journal

Freelancing Is Going Mainstream

A new iHire survey of 2,250 U.S. workers finds that 61% find freelance or project-based work appealing, and 41% already have freelance experience. The appeal is driven more by lifestyle than money — though financial pressure is clearly a factor. The top draws are flexible hours (73%), remote work options (71%), and work-life balance (61%). Sixty-three percent said rising costs of living have influenced them to freelance, and 51% said freelance income is either extremely or very important to their overall financial stability.

Notably, nearly half of active freelancers (46%) are also employed full-time, suggesting freelancing functions more as a supplement than a replacement for traditional employment. The biggest friction points between freelancers and clients are unclear expectations and poor communication, each cited by 36% of respondents.

Read more via iHire

Technology & Innovation

"Tokenmaxxing": Tech Workers Are Now Competing to Use the Most AI

A new status game has taken hold at some tech companies. Employees compete to consume as many AI tokens as possible — sometimes spending thousands of dollars a day — as employers increasingly tie AI usage to performance reviews. Meta, OpenAI, and other companies have introduced internal leaderboards tracking employee token consumption, rewarding heavy users and flagging those who lag behind. One OpenAI engineer processed enough text to fill Wikipedia 33 times in a single week.

The explosion in token use is being driven by agentic coding tools that run unsupervised for hours. Anthropic more than doubled its revenue projections in two months this year largely because of the growth of its agentic coding tools. The obvious problem: leaderboards measure quantity, not quality.

Read more via The New York Times

A Two-Person Company Built with AI Is on Track to Hit $1.8 Billion in Sales This Year

With a dozen AI tools and $20,000, Matthew Gallagher and his brother launched telehealth provider Medvi in September 2024. In its first full year, the company generated $401 million in revenue and is profitable, with $65 million in net profit last year. Gallagher used tools including ChatGPT, Claude, Grok, Midjourney, and Runway to build and run the business, outsourcing medical, pharmacy, and compliance functions to third-party platforms. He has no plans to hire.

Read more via The New York Times

AI-Generated Applications Are Pushing Employers to Make Interviews More Human

As AI makes it easier for candidates to submit polished applications at scale, resumes and cover letters are becoming increasingly unreliable signals. More than 40% of employers have extended probation periods because they can no longer reliably assess candidates' real skills during the application process, according to data from HR platform Deel. L'Oréal has declared interviews "AI-free zones," requiring at least one face-to-face conversation before any hire. EY has trained more than 20,000 interviewers to probe how candidates think rather than what they've done.

The problem cuts both ways: many candidates say they turned to AI precisely because automated screening was already rejecting their applications with little human review — creating a cycle of AI generating applications and AI filtering them out.

Read more via Financial Times

Companies Are Spending on AI Tools — and Skipping the Training

New Forrester research finds that despite widespread AI deployments, employees' actual understanding of how to use the tools has barely moved. Understanding of prompt engineering — a core skill for tools like Microsoft 365 Copilot and Google Workspace — grew by just 4 percentage points over the past year, from 22% to 26%. Only half of organizations that have deployed AI applications offer any training for non-technical employees.

The gap between leadership expectations and employee reality is stark: 96% of C-suite leaders expected AI to increase output, while 77% of employees said AI tools actually increased their workload, according to a separate Culture Amp report. Forrester's lead researcher placed the blame squarely on employers: "It's you, the employer, who hasn't yet cultivated a learning and engagement environment sufficient to helping employees attain these skills."

Read more via HR Dive, Forrester

Most European Companies Can't Shut Down an AI System in a Crisis

A new ISACA survey of 681 digital trust professionals in Europe found that 59% didn't know how quickly their organization could stop an AI system during a security incident, and only 21% said they could do so within 30 minutes. Fewer than half (42%) said they were confident their organization could investigate and explain a serious AI incident to leadership or regulators. One in five respondents didn't know who would be ultimately accountable if AI caused harm. The findings arrive as the EU AI Act tightens requirements around explainability and accountability.

Read more via IT Brief

AI Roundup

Anthropic accidentally leaked part of Claude Code's internal source code. The AI startup confirmed that a "release packaging issue caused by human error" exposed part of the source code for its popular coding assistant, though the company said no customer data or credentials were involved. The leaked code quickly spread online, with one post accumulating more than 21 million views. The incident was Anthropic's second data disclosure in under a week, following a separate incident in which descriptions of an upcoming model were found in a publicly accessible data cache. (CNBC, The Wall Street Journal)

An AI machine in China is sorting used clothes by fabric composition 50 times faster than a human worker. Chinese recycling company DataBeyond has developed a machine that can process two tons of textile waste per hour, compared to two days for two human workers doing the same job. The technology has already cut the share of textiles sent to landfill or incineration at one facility from 50% to 30%. The facility's sales director said the ultimate goal is a fully automated "dark factory" running 24 hours without human workers. (Associated Press)

OpenAI shut down Sora, its AI video generation tool. The company abruptly pulled the plug on Sora just weeks before it was set to begin licensing the technology to Hollywood studios including Disney, which had invested $1 billion in OpenAI partly based on the promise of the product. The core problem: Sora was consuming too many AI chips and wasn't profitable. OpenAI needed those computing resources for a new model and its push into agentic AI tools for enterprise customers — where it has been trailing rival Anthropic. (The Wall Street Journal)

Global Snapshot

Israel: About half of Israeli tech companies report that more than a quarter of their workforce is absent due to reserve duty, school closures, and security restrictions, as the conflict with Iran enters its second month. 42% of firms report delays in meeting development goals, 75% say international flight restrictions are disrupting business operations, and 31% of surveyed tech companies are considering relocating business activity abroad — with a quarter fearing full closure if the conflict continues for another month. (Times of Israel)

Japan: More than 80% of Japanese respondents support allowing more foreign workers into the country to support economic growth, with the strongest preference for workers with specialized skills. However, support drops sharply when the question shifts to permanent immigration: 57% oppose allowing foreigners to settle permanently, with younger respondents aged 18 to 39 the most opposed at 63%. (Japan News)

Saudi Arabia: Saudi Arabia's unemployment rate among nationals fell to 7.2% in Q4 2025, down from 7.5% the prior quarter. Female unemployment among Saudi nationals declined to 10.3%, down 1.6 percentage points year over year, while the female employment rate has risen 4.2 percentage points over the past five years to 31%. (Saudi Gazette)

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About the Need to Know Briefing

The Need to Know Briefing is published weekly by Kelly, curating the most important workforce and hiring insights for HR leaders and hiring managers.