Employment Update: Job Growth Accelerates in March Despite Slight Uptick in Unemployment

The U.S. economy added 228,000 jobs in March 2025 vs. the forecast of 140,000, a stronger gain than in February and well above the average of the previous 12 months. However, the unemployment rate ticked up slightly to 4.2%, continuing its trend of stability within a narrow range since May 2024. 

Key Highlights

March's labor market report from the U.S. Bureau of Labor Statistics (BLS) signaled continued job growth across several key sectors, even as overall unemployment saw a modest increase. The number of unemployed individuals remained at 7.1 million. Meanwhile, persistent challenges in long-term unemployment and part-time work for economic reasons suggest a complex labor market.

Here are some of the highlights:

• The unemployment rate rose slightly to 4.2%, with approximately 7.1 million people unemployed.
  

• Long-term unemployment remained stable at 1.5 million, representing 21.3% of the total unemployed population.
  

• The labor force participation rate edged up slightly to 62.5%, while the employment-population ratio held at 59.9%.
  

• The number of people employed part-time for economic reasons was largely unchanged at 4.8 million, reflecting ongoing underemployment concerns.
  

• The number of people not in the labor force but wanting a job held steady at 5.9 million.

Job Gains Occurred Across Several Sectors

March saw job growth across healthcare, social assistance, retail, and transportation, though government employment particularly at the federal level declined again.

• Healthcare led the way with 54,000 new jobs, including gains in ambulatory services (+20,000), hospitals (+17,000), and nursing/residential care (+17,000).
  

• Social assistance added 24,000 jobs, notably in individual and family services (+22,000).
  

• Retail trade grew by 24,000 jobs, mostly driven by the return of workers from a strike in the food and beverage segment (+21,000).
  

• Transportation and warehousing added 23,000 jobs, with strong hiring in couriers and messengers (+16,000) and truck transportation (+10,000), partially offset by losses in warehousing and storage (-9,000).
  

• Federal government employment declined by 4,000 jobs, following a drop of 11,000 in February.
  
  

Employment remained little changed in industries such as construction, manufacturing, professional services, and hospitality.

Wages and Hours

• Average hourly earnings rose by 9 cents (0.3%) to $36.00 in March, with a 3.8% increase over the past year.
  

• For production and nonsupervisory employees, average hourly earnings rose by 5 cents to $30.96.
  

• The average workweek held steady at 34.2 hours overall, with slight increases in hours worked among production and nonsupervisory employees (33.8 hours).

Economic Context: Trade Uncertainty Tempers Optimism

Despite the robust job growth, the March report arrives amid rising macroeconomic uncertainty. President Trump’s recent announcement of tariffs on all U.S. trading partners has heightened fears of a global trade war, raising concerns about future business investment and hiring trends.

Looking Ahead

The March employment report reflects a labor market that continues to expand at a moderate but consistent pace. Despite a small rise in the unemployment rate, strong gains in healthcare, social services, and transportation point to healthy demand for labor in key sectors. However, caution remains, particularly with recent federal job cuts and ongoing economic uncertainty. Companies may need to stay agile in their hiring strategies, balancing growth with workforce stability in a competitive labor environment. As I am writing this the tariffs are just hitting and if not resolved quickly we will surely see an uptick in unemployment.