Job growth was stronger than expected in March, providing at least temporary reassurance that the labor market is stable, the Labor Department reported Friday.
Nonfarm payrolls increased 228,000 for the month, up from the revised 117,000 in February and better than the Dow Jones estimate for 140,000, according to the Bureau of Labor Statistics.
However, the unemployment rate moved up to 4.2%, higher than the 4.1% forecast as the labor force participation rate also increased.
Though the headline number beat estimates, the report comes against a highly uncertain backdrop after President Donald Trump’s tariff announcement this week that has intensified fears of a global trade war that could damage economic growth.
Stocks reacted little to the report, with futures tied to the Dow Jones Industrial Average still off by more than 1,000 points while Treasury yields held sharply negative.
“Today’s better than expected jobs report will help ease fears of an immediate softening in the US labor market,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management. “However, this number has become a side dish with the market just focusing on the entrée: tariffs.”
Trump announced a flat duty of 10% against all trading partners along with a wide menu of so-called reciprocal tariffs that already have provoked retaliation from China and others. Wall Street has been in aggressively sell-off mode for the past two days, with stocks tumbling and investors flocking to the safety of fixed income.
Previous indicators showed the labor market holding up, but the tariff moves raise the possibility that companies will hold back on hiring as they assess just what the new trade landscape will look like.
The March numbers, though, pointed to a still-strong labor market, though the January and February counts saw substantial downward revisions. In addition to the cut of 34,000 from the initial count for February, January’s growth is now at just 111,000, down 14,000 from the previous estimate.
For March, health care was the leading growth area, consistent with prior months. The industry added 54,000 jobs, almost exactly in line with its 12-month average. Other growth areas included social assistance and retail, which both added 24,000, while transportation and warehousing showed a 23,000 increase.
Federal government positions declined by just 4,000, despite the Elon Musk-led efforts, though the Department of Government Efficiency, to pare the federal workforce. However, the BLS noted that workers on severance or paid leave are counted as employed. A report Thursday from consultancy firm Challenger, Gray & Christmas indicated that DOGE-related layoffs have totaled more than 275,000 so far.
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