Job growth was much stronger than expected in March as employers added 228,000 new hires to their payrolls. The three-month average dipped to 152,000 from 184,000 in the prior month. Combined revisions to January and February showed 48,000 fewer jobs were created than previously estimated. The unemployment rate ticked up a tenth of a percentage point to 4.2 percent but remained in the narrow range of 4.0 percent to 4.2 percent where it has been since May 2024. The better-than-expected jobs report comes just two days after President Trump announced his administration’s new tariff regime. The market response to this new policy suggests a downshift in economic growth and potentially higher prices. It will be difficult for the Fed to cut rates in the face of such a strong jobs report, but that hasn’t stopped the market from expecting five rate cuts this year. The Fed will need to gauge whether the balance of risk of its “wait-and-see” approach is still appropriate or if further rate cuts are justified to guard against a downturn in growth.

Employers added 228,000 new hires to their payrolls in March, according to the Bureau of Labor Statistics. Private-sector firms added 209,000 workers, nearly doubling the 116,000 in February. Government hiring accelerated, gaining 19,000 jobs after adding just 1,000 in the prior month. The federal government shed 4,000 positions, a second-straight month of job cuts. Goods-producing industries’ hiring slowed, adding 12,000 new workers during the month after adding 26,000 jobs in February. Construction hiring held steady at 13,000. Manufacturers added 1,000 workers. Service-providing industries’ hiring jumped 197,000 as job growth in the health care and social services sector remained strong, adding 77,800 jobs. Leisure and hospitality erased the losses from the prior month, adding 43,000 positions in March after a two-month decline totaling 31,000. Retail trade sector hiring was strong with job gains of 23,7000. The temporary help services sector cut 6,400 positions, a smaller drop than the 10,100 in the prior month. Data revisions to prior months were negative. Payroll employment for January was revised lower by 14,000 and the data for February was revised down by 34,000. Combined, employment gains were 48,000 fewer than previously reported.

The unemployment rate ticked up to 4.2 percent in March from 4.1 percent in February. The labor force participation rate inched up to 62.5 percent from 62.4 percent in February as 232,000 workers entered the labor force. The household survey showed that the number of employed increased 201,000 while the number of unemployed increased by 31,000.

Average hourly earnings rose 9 cents in March – a 0.3-percent monthly increase. Over the past 12 months, average hourly earnings increased by 3.8 percent. Average hourly earnings for production and non-supervisory workers increased by 5 cents, which was a 0.2-percent monthly gain, a slowdown from the 0.4-percent monthly rise in February.

Data junkies, here’s your fix: The March U-6 (the broadest measure of unemployment) retreated modestly to 7.9 percent from 8.0 percent in the prior month.