Breitbart Business Digest: The Myth of the Frozen Labor Market

The Puzzle of Rising Wages and Low Payroll Growth

Here is a question that has been nagging at economists: why has wage growth held up so well when payroll growth has been so weak?

In 2025, the U.S. economy added just 181,000 workers to payrolls — a number that would have been considered anemic in any recent year. Yet nominal wages grew at an above-average 3.8 percent across the economy and 4.3 percent in manufacturing. On Friday, the March jobs report came in at 178,000 against expectations of just 59,000 — a blowout that caught the consensus flat-footed. Unemployment fell to 4.3 percent.

While some of the best economists we know are still worried about softness in the labor market—which they blame on what they see as the Federal Reserve’s overly restrictive monetary policy—we’re increasingly persuaded that they may be not be seeing the full picture. If the