March Nonfarm Payrolls Surpass Expectations, Unemployment Rate Moves Higher

10:16 AM EDT, 04/04/2025 (MT Newswires) -- The US economy added more jobs than expected in March, while the unemployment rate ticked up, according to government data released Friday.

Total nonfarm payrolls rose by 228,000 last month, the Bureau of Labor Statistics reported. The consensus was for a 140,000 increase, according to a survey compiled by Bloomberg. Gains for February were revised down by 34,000 to 117,000 and lowered by 14,000 for January.

The unemployment rate increased to 4.2% from February's 4.1%, which was the market view for March.

"Nonfarm payrolls surprised all expectations, coming in well above the consensus forecast and surpassing each of the two prior months job gains by a little over 100,000," TD Economics Senior Economist Thomas Feltmate said in a separate note. "Given the ongoing efforts to shrink the federal government and rising trade uncertainty, we suspect that job growth is likely to soften over the coming months."

Federal government employment declined by 4,000 in March, which was "much less than expected," Oxford Economics Lead US Economist Nancy Vanden Houten said in remarks emailed to MT Newswires. "We expect layoffs of federal workers to accelerate in the months ahead," according to Vanden Houten.

The Department of Government Efficiency, created by President Donald Trump and being led by Elon Musk, is spearheading federal spending cuts and a plan to pare down the government workforce.

Private payrolls advanced by 209,000 in March, accelerating from a 116,000 gain the month prior and exceeding the Bloomberg consensus of 135,000. The service industry added 197,000 jobs last month, while employment for the goods-producing sector slowed down at 12,000 hires, BLS data showed.

The latest jobs report allows the Federal Reserve to keep monetary policy on extended hold as it evaluates the impact of Trump's new tariffs on inflation, Vanden Houten said. The White House on Wednesday imposed duties on several countries, including China, which responded on Friday with its own retaliatory tariffs of 34% on US products.

"Should the tariffs remain elevated for longer, the odds of the US economy slipping into a recession start to increase," Feltmate said.

Average hourly earnings grew by 0.3% sequentially, the BLS report showed, in line with the Street's view. The annual measure rose 3.8%, falling short of the 4% rise modeled by analysts.

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