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Economic News

United States: Hiring Picked Up in March

April 4, 2025
Francis Généreux
Principal Economist

Highlights

  • According to the establishment survey, the US economy added 228,000 jobs in March. This comes after an increase of 117,000 in February (revised from 151,000).
  • Average hourly earnings edged up 0.3% in March after a 0.2% gain in February. However, the year-over-year change dipped from 4.0% to 3.8%.
  • The unemployment rate inched up from 4.1% in February to 4.2% in March.

Comments

The US economy needed some good news. And it got it this morning in the form of March’s jump in hiring. The 228,000 jobs added is the best print so far this year and almost double February’s figure. It’s also well above the consensus expectation, which was around 140,000 jobs.

 

So where did this momentum come from? Private services employment surged, and we saw solid gains in retail, transportation services and food services. The construction sector is also looking positive. However, hiring slowed in the manufacturing and resources sectors. In all, 54.2% of the 250 sectors surveyed reported an increase in payrolls in March, compared to 56.0% in February. This means that although hiring increased in March, it was less broad-based.

 

One factor that dragged down consensus expectations for March was the impact of federal government job cuts. The number of federal workers dropped by 4,000 in March after falling by 11,000 in February. Although things remain unclear, the news surrounding DOGE-driven layoffs and federal agencies being shuttered continues to suggest that the federal payroll will be slashed further. This federal downsizing is likely to bite harder later in the year. For now, the other levels of government are offsetting the decline in the federal workforce.

 

March’s rise in unemployment isn’t especially concerning. In fact, it has just returned to the 2024 peaks we witnessed in July, August and November. According to the household survey, 201,000 jobs were created in March, and the rise in unemployment was due to an even faster increase in the labour force.

Implications

March’s strong job creation figures are good news, and the rise in the unemployment rate isn’t particularly worrying yet. However, the risks to the US economy—including those generated by the Trump administration’s protectionist trade policy—are significant, and the labour market’s resilience will soon be put to the test.

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