The United States added 228,000 jobs in March 2025, showing stronger growth than expected, according to new data released Friday by the Bureau of Labor Statistics (BLS). Despite the solid job gains, the unemployment rate rose slightly from 4.1% to 4.2%. Economists say the rise was due in part to more people entering the workforce.
This snapshot of the labor market comes just days after major changes in U.S. trade policy. President Donald Trump imposed steep tariffs on key global trading partners. The move sparked a global market sell-off and raised fears of a trade war. These changes were not reflected in the March jobs data but are expected to influence future economic reports.
Job Growth Beats Forecasts
In March, job growth beat forecasts by nearly 100,000 positions. Economists had predicted 130,000 new jobs. Instead, the U.S. economy added 228,000, with the largest increases in health care, social services, and leisure and hospitality.
Health care and social assistance led the way with 77,800 new jobs, while the leisure and hospitality industry bounced back from early-year weather impacts with 43,000 new jobs.
The goods-producing sector showed mixed results. While manufacturing added 1,000 jobs, the durable goods industry lost 3,000 jobs. That slowdown follows a February gain in manufacturing that was later revised down.
Federal Layoffs Begin to Show
Federal employment continued to shrink. The government lost 4,000 jobs in March, following 11,000 job cuts in February. These cuts are tied to President Trump’s spending reductions and policies to reduce the size of the federal workforce.
The Department of Government Efficiency has already announced nearly 300,000 job eliminations. Many of those jobs will disappear gradually, so the full impact on the labor market will unfold over time.
“The layoffs are a slow drip,” said Dana Peterson, chief economist at The Conference Board. “But they will eventually impact the broader economy, especially when contractors lose work and local funding gets cut.”
State and Local Governments Add Jobs
While the federal government trimmed staff, state and local governments added 19,000 jobs in March. These gains helped offset losses at the federal level. Over the past few years, local hiring has supported overall public-sector job growth.
Wages Rise, But Uncertainty Looms
Wages increased by 0.3% for the month and 3.8% over the past year. That means more income for households, which is good for consumer spending — a key part of the economy.
Still, there are signs of slowing in the job market. Hiring and quitting activity have cooled, and job “churn” is down. Fewer people are leaving jobs voluntarily, which can be a signal of caution among workers and employers.
“There’s resilience, but also signs of a slowdown,” said Ger Doyle, U.S. country manager at ManpowerGroup. “Employers are being careful as they deal with growing uncertainty.”
Tariffs Add Pressure to the Outlook
Earlier this week, President Trump rolled out sweeping tariffs against several U.S. trading partners. In response, China hit back with its own tariffs, deepening fears of a global trade war. The market reacted sharply, with the Dow falling by 1,450 points (3.6%), while the S&P 500 and Nasdaq both dropped by over 4%.
“This jobs report is old news,” said Kathy Bostjancic, chief economist at Nationwide. “It shows the labor market was solid, but that was before the new trade actions.”
Economists warn that ongoing trade tensions could lead to stagflation — a mix of slow growth, high inflation, and rising unemployment.
“If tariffs continue and retaliation builds, we could see layoffs and weaker growth,” Peterson said.
What the Fed Is Watching
The Federal Reserve is expected to keep interest rates steady for now. Chair Jerome Powell said Friday that the Fed is not rushing to make changes.
“We’re taking our time to assess the situation,” Powell said at a conference in Arlington, Virginia. “We’re watching the data closely.”
Still, President Trump has urged Powell to cut interest rates, a request he has made several times before.
March’s strong job numbers show the U.S. labor market remains steady for now. But rising trade tensions and federal job cuts are casting a shadow over future reports. The coming months will reveal whether the economy can stay on track or if recent policy shifts will cause deeper disruptions.
