The U.S. labour market delivered a stronger-than-expected performance in March, with nonfarm payrolls increasing by 228,000, significantly above market expectations of 135,000, according to the latest data from the Bureau of Labor Statistics (BLS).
Despite the upbeat headline figure, the unemployment rate ticked up to 4.2%, above the 4.1% forecast, as the labour force participation rate also climbed, suggesting more Americans are re-entering the job market.
The positive jobs data came amid a cloud of economic uncertainty following President Donald Trump’s surprise move to impose broad-based tariffs on U.S. trading partners. The announcement has intensified concerns over a potential global trade war and its impact on economic growth.
Trump’s tariff policy includes a blanket 10% duty on imports from all major trading partners, alongside a complex array of “reciprocal tariffs” which have already triggered retaliatory measures from China and other nations.
The president responded to the jobs report with enthusiasm on social media, posting on Truth Social: “GREAT JOB NUMBERS, FAR BETTER THAN EXPECTED. IT’S ALREADY WORKING. HANG TOUGH, WE CAN’T LOSE!!!”
Economists, however, have warned that the labour market may yet feel the pressure of rising trade tensions. While hiring held strong in March, there are concerns that firms could become more cautious in the coming months, waiting for clarity on the new trade environment before expanding payrolls.
The March report also revealed downward revisions to previous months’ figures. February’s job gains were cut by 34,000, and January’s total was revised down by 14,000 to 111,000.
In terms of sector performance, health care led job creation with 54,000 new positions, in line with its recent trends. Social assistance and retail both added 24,000 jobs, while transportation and warehousing contributed 23,000.
Federal government employment slipped by 4,000 positions, a modest decline given Elon Musk’s ongoing push - through the Department of Government Efficiency (DOGE) - to reduce federal staffing levels.
Notably, while the BLS counts workers on paid leave or severance as employed, a recent report from Challenger, Gray & Christmas estimated that DOGE-related layoffs have already topped 275,000.
Despite the rise in the unemployment rate, the labour market still appears fundamentally solid. However, analysts caution that if tariff-related disruptions spread across industries, the resilience seen in March may be short-lived.
