The US labor market report for the month of March showed a mixed view on how the jobs market performed in March. Friday’s Nonfarm Payrolls (NFP) figures exceeded economists’ expectations, showcasing robust job creation with significantly high numbers of new jobs added during the month.
Meanwhile, wage growth aligned with analyst estimates. However, the unemployment rate edged higher.
Breaking Down the Report
The March NFP report indicated that the US economy added 228,000 jobs, though earlier months were revised down—February dropped by 34,000 to 117,000, and January fell by 14,000 to 111,000.
The private sector added 209,000 jobs while the government payrolls added 19,000. Health care led the gains with 54,000 new jobs, followed by social assistance and retail at 24,000 each, and transportation and warehousing at 23,000. ⁽¹⁾
Federal government jobs dipped by 4,000, even with efforts to trim the workforce, though severance or paid leave keeps some counted as employed. A separate report noted over 275,000 layoffs tied to DOGE initiatives. ⁽²⁾
As hiring increased, the unemployment rate increased from 4.1% to 4.2%. Average hourly salaries met projections at 0.3% MoM, but pay inflation was 3.8% YoY, 0.1% below the projection at its lowest level since July 2024. ⁽³⁾
Despite trade tensions and market uncertainty, the labor market held firm in March, though tariff effects and revisions cast a shadow over the outlook. ⁽⁴⁾
Market Reaction
Financial markets were mostly focused on Trump’s tariff effects with major indices extending losses throughout the day. Even after a robust NFP report, markets ignored the data.
The Dow Jones sank more than 2,000 points on Friday and the S&P 500 dropped 6%, while the Nasdaq and the Russell 2000 entered bear market territory as tariff uncertainty looms. ⁽⁵⁾
Following the report, the US Dollar Index increased by 1.11%, while other major currencies saw declines. Because of the strength of the US dollar and traders’ and investors’ profit-taking, gold fell $73 from $3,110. ⁽⁶⁾
