**U.S. Economy Adds 228,000 Jobs in March as Unemployment Rises to 4.2%**
The U.S. labor market showed stronger-than-expected growth in March, adding 228,000 nonfarm payroll jobs, according to the latest report from the Bureau of Labor Statistics. This significantly surpassed the estimated gain of 140,000 jobs for the month. However, the national unemployment rate ticked up slightly to 4.2%, the highest level in three years, rising from 4.1% in February.
February job growth was also revised downward to 117,000 from a previously reported 151,000.
Wage growth remained steady in March, with average hourly earnings increasing by 0.3% for the second consecutive month. On a year-over-year basis, wage growth slowed, easing to 3.8% in March from 4.0% in February. This fell below economists’ expectations of steady 4.0% annual wage growth.
The labor force participation rate saw a slight improvement, rising to 62.5% in March—up from 62.4% in February.
Federal employment continued to decline, with a reduction of 4,000 positions in March following a larger loss of 11,000 jobs in February. Economists had anticipated federal job losses ranging from 10,000 to 15,000 in March. However, the Bureau of Labor Statistics noted that employees on paid leave or receiving severance pay are still included in the total count of employed workers, which may understate the full impact of job cuts within the federal government.
These employment figures were collected prior to the Trump administration’s most recent tariff increases, although they already reflect economic responses to earlier tariffs on China, Canada, and Mexico, as well as effects of federal layoffs and spending reductions.
Given continued labor market resilience and inflation levels remaining above the 2% target, the Federal Reserve is not expected to cut interest rates during its upcoming May policy meeting.
