The US labor market continued to show resilience in March, adding more jobs than expected.
However, a slight uptick in the unemployment rate and rising global trade tensions, driven by President Donald Trump’s surprise tariff announcements, have cast a shadow over the otherwise positive employment data.
Jobs report March 2025
According to the Bureau of Labor Statistics (BLS), the US economy added 228,000 nonfarm payroll jobs in March—well above economists’ expectations of 140,000 and significantly higher than February’s revised total of 117,000.
Over the past 12 months, the monthly average has stood at 158,000, making March’s report a sign of stronger-than-average hiring momentum.
U.S. added 228K jobs in March, beating expectations. Unemployment steady at 4.2%. Strong hiring in health care, social assistance, and transportation. Wages up 3.8% YoY. Federal jobs dipped. January & February revised down. Solid but mixed labor report.
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Despite the solid job gains, the unemployment rate rose slightly to 4.2%, up from 4.1% the previous month.
The increase came even as the labor force participation rate rose to 62.5% in March from 62.4% in February—indicating more Americans are re-entering the workforce.
Wage growth, a key measure watched closely by the Federal Reserve for inflationary pressure, came in at 3.8% year-over-year, slightly below February’s 4%.
On a month-over-month basis, average hourly earnings grew by 0.3%, up from the prior 0.2%.
US jobs report: federal employment cuts
The report also highlighted a continuing trend in federal employment cuts, likely linked to Elon Musk’s Department of Government Efficiency (DOGE) initiative.
Federal government jobs fell by 4,000 in March, following an 11,000 drop in February.
While small in absolute terms, the cuts signal a shift toward leaner government staffing under the current administration.
But any optimism from the robust hiring figures was quickly muted by escalating trade tensions.
On Wednesday, President Trump stunned markets by slapping a 34% tariff on all Chinese and European Union imports, a move seen by many economists as a serious risk to global trade stability.
In retaliation, China announced it would impose matching 34% tariffs on all US imports starting April 10.
The fallout was immediate and severe. In less than 48 hours, $2.5 trillion was wiped off global equity markets, and US stock futures plunged.
Ahead of Friday’s jobs release, Dow Jones futures were down nearly 3% (about 1,200 points), while S&P 500 and Nasdaq 100 futures dropped 2.9% and 3%, respectively.
It’s important to note that the March jobs survey was conducted before the tariff announcements, meaning any labor market impact from the trade war will likely surface in future reports.
Looking ahead, analysts warn that ongoing trade policy uncertainty, coupled with potential retaliatory tariffs, could start to hurt business confidence, dampen hiring, and raise recession risks.
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