US added 228,000 jobs in March as economy showed strength in buildup to
Trump trade wars
[April 05, 2025] By
PAUL WISEMAN and ANNE D'INNOCENZIO
WASHINGTON (AP) — U.S. employers added a surprising 228,000 jobs last
month, showing that the American labor market was in solid shape as
President Donald Trump embarked on a risky trade war with the rest of
the world. The unemployment rate ticked up to 4.2%.
The hiring numbers were up from 117,000 in February and were nearly
double the 130,000 that economists had expected. Labor Department
revisions shaved 48,000 jobs off January and February payrolls.
Workers’ average hourly earnings rose 0.3% from February, about what
economists had expected. Compared to a year earlier, hourly pay was up
3.8%, a bit lower than the 4% that had been forecast and nearing the
3.5% year-over-year gains that are seen as consistent with the Federal
Reserve's 2% annual inflation target.
Healthcare companies added almost 54,000 jobs and restaurants and bars
nearly 30,000 as the job market bounced back from bitter winter weather
in January and February. The federal government lost 4,000, a sign that
Elon Musk's purge of the federal workforce may only be starting to show
up in the data.
The unemployment rate rose modestly but for what economists consider a
good reason: 232,000 people entered the labor force — which means they
were either working or looking for work — though not all of them found
jobs right away.
Trump was quick to claim victory, posting on his Truth Social platform
that the hiring numbers proved that his policies were “already
working.'' He also said: ”My policies will never change.''
But economists say the jobs numbers provide a rearview mirror look at
the economy and worry about damage going forward from his policies,
including the sweeping “Liberation Day’’ import taxes he announced
Wednesday. Financial markets have been reeling in the face of his trade
wars.
The Dow Jones index plunged 1,000 points at the opening bell Friday
after China announced retaliatory tariffs against the U.S. That followed
a 1,600-point drop on the previous day.
“This could be the high water mark as we go into spring,’’ said Diane
Swonk, chief economist at the accounting giant KPMG. Economic
uncertainty remains high, she said. "Do the tariffs hold? Does the trade
war escalate? How disorderly do markets get? There’s a lot of things in
play right now.''
Other economic threats come from Trump's firings of federal workers and
the cancelling of government contracts and his promise to deport
millions of immigrants who are working in the United States illegally.
In the past several years, those workers have eased labor shortages and
helped the economy keep growing. If they’re deported or frightened out
of the job market, companies could have to cut back on what they do or
increase wages and raise prices, potentially feeding inflation.
The job market has cooled from the red-hot hiring days of 2021-2023.
Employers added 117,000 jobs in February and 111,000 in January. Not bad
but down from monthly averages of 168,000 last year, 216,000 in 2023,
380,000 in 2022 and a record 603,000 in 2021 as the economy surged back
from COVID-19 lockdowns.
“The market needed today’s number,” said Seema Shah, Chief Global
Strategist, Principal Asset Management. “Everyone knows that economic
weakness is coming, but at least we can be reassured that the labor
market was robust coming into this policy-driven shock.''
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 In 2022 and 2023, the Fed raised its
benchmark interest rate 11 times to combat inflation. Economists
expected the higher borrowing costs to tip the United States into
recession. But they didn’t. Consumers kept spending, employers kept
hiring and the economy kept growing.
Now there are increasing worries about the health of the economy.
The University of Michigan’s consumer sentiment survey last month
showed that two-thirds of American consumers expected unemployment
to rise over the next year — the highest reading in 16 years.
Jorge Marquez, who oversees training and job placement programs as
chief impact officer at Goodwill Southern California, said that
uncertainty about federal job and spending cuts and Trump’s trade
wars has paralyzed hiring for managerial jobs.
Policy, Marquez said, “keeps kind of flip-flopping.... Anything can
happen now.’’ But he said that construction and hospitality firms
still need entry-level workers. “They can’t bring them on fast
enough,’’ said Marquez, who is also chairman of the Los Angeles
County Workforce Development Board.
At Fort Hamilton Distillery in Brooklyn, co-founder Alex Clark would
like to add to his staff of 11 full- and part-time workers. But he
doesn’t want to risk it with so much uncertainty surrounding
economic policy.
“If the world was sailing on an even keel right now, we’d be looking
to add bodies,” he said. “But we aren’t getting that vibe.’’
He’s been buying goods in advance to get ahead of Trump’s tariffs –
but that means less money for an expanded payroll. He bought a
pallet stacker – a mini forklift – “real quick before the tariffs
kicked in on China,’’ he said. “We front-loaded some of these
purchases to ensure that we have enough in stock ... Normally, I
wouldn’t be buying a year’s worth of corks (from Mexico). I don’t
need a year’s worth of corks. I need three months’ worth of corks.’’
“We’re tying up cashflow now for things we don’t need,’’ he said.
“If we don’t, we may or may not have to pay more in the future...
The uncertainty is what’s killing us.’’
Jessica Bettencourt is CEO of Klem’s, a third-generation store in
Spencer, Massachusetts that sells everything from from lawn and
garden items to workwear and gifts, with about 70 workers. She said
she's going to pause hiring as she navigates the barrage of new
tariffs. Her items are sourced all over the world, including China
and Vietnam.
Suppliers have already notified her of price increases and
Bettencourt expects that pace to accelerate. She sells U.S.-made
boots for nearly $400, compared with the $150 versions made outside
the U.S.
Prices from vendors may be volatile, Bettencourt said.
“I immediately emailed my staff and asked them to make sure to order
more rolls of blank price labels,'' she said. "It is going to be a
long year.”
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D'Innocenzio reported from New York.
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