Economy added 228,000 jobs in March: The key facts and figures

The interpretation

Dan North, a senior economist with Allianz Trade Americas, said he was surprised by the scale of the job growth last month. He had expected that recent indications that uncertainty was rising, such as last month’s consumer sentiment report, would filter through to the labor market. He said the uncertainty didn’t show up in the employment numbers as it has in other reports.

“I have to say it’s a pretty big surprise,” North told the Washington Examiner. “This is, I think, a pretty strong report from what I can see so far off the headline.”

What it means … for Trump

Friday’s report shows that the labor market continued to chug along in March. While the unemployment rate ticked up a bit, more jobs were added than most economists anticipated. President Donald Trump will undoubtedly tout the numbers as proof that his economic agenda is working as planned.

Trump is implementing a set of major economic policy changes that could dramatically change the outlook for the months ahead. Most notably, this past week he launched sweeping tariffs that apply to countries across the world and represent a level of protectionism not seen since before the Great Depression. He is also working with congressional Republicans to pass a massive fiscal overhaul that would extend tax cuts and possibly cut some federal spending. 

Democrats would use any weakness in the labor market to place blame on Trump and his “Make America Great Again” agenda.

What it means for the Fed

Although the pace of jobs growth picked up in March, investors were betting Friday morning that Federal Reserve officials will move faster to cut interest rates, likely because of the market turmoil from the rollout of the Trump tariffs. 

Bond markets indicated that the central bank is now more likely to cut its interest rate target in June and implement further cuts in the months ahead.

After a long period of very high interest rates designed to quash inflation, the Fed finally began cutting short-term rates in September.

The underlying reality

Friday’s report suggests that the jobs market was losing momentum in the first quarter despite relatively strong gains last month. 

It is helpful to look at the overall trend for the labor market. The three-month moving average of job gains fell in March to 152,000, thanks in large part to downward revisions for the previous two months. That is still above the rate needed to keep up with population growth, though.

Roughly 113,000 new payroll jobs are needed each month to keep unemployment from rising, according to the Federal Reserve Bank of Atlanta. Separate estimates that take into account the full extent of recent immigration put the number as high as 200,000, although that may have changed in recent months, as the Trump administration has significantly curbed unauthorized border crossings.

Prime-age employment, relative to the overall population, is strong by historical standards, although it appears to have peaked in recent months.

Recession watch

The unemployment rate, taken from the jobs report’s household survey, is still low by historical standards. It rose by a tenth of a percentage point to 4.2% in March after gradually creeping up over the past year.

Recessions entail a rising unemployment rate.

Friday’s data suggest that the U.S. labor market is still moving away from triggering one major recession indicator — namely, when the three-month moving average of the unemployment rate rises half a percentage point relative to its minimum point over the past year. This indicator, known as the Sahm Rule, signaled the start of all postwar recessions.

The indicator had been triggered in mid-2024 but is no longer signaling a recession.

Federal government employment

Federal government employment fell by 4,000 in March and is now down about 15,000 since Trump entered office. The number of federal employees is a key statistic to watch as Trump and Department of Government Efficiency leader Elon Musk have aimed to reduce the federal workforce significantly.

Other industries

The leisure and hospitality sector in the past year has finally exceeded the employment levels it reached in February 2020, right before restaurants and bars were forced to shut down across the country.

Construction employment has remained robust, even as the housing market has taken a massive hit over the past few years as mortgage rates have soared alongside the Fed’s rate hikes. That’s in part because of a huge backlog of construction of multifamily housing over the past year. Economists will watch closely for any sign of slowing hiring in construction.

Unemployment rates by race and ethnicity

The household survey also includes unemployment rates by race and ethnicity. Rates for all groups neared record lows in the past few years. Unemployment rates rose slightly for black and Asian workers in March but fell for white and Hispanic workers.