US employers added a surprise 228,000 jobs in March — much higher than analysts had anticipated in the last report before President Donald Trump unveiled his sweeping reciprocal tariff plan.
New payroll reports came in at 228,000, above last month’s 151,000 jobs and an especially robust figure considering significant federal layoffs from Elon Musk’s Department of Government Efficiency.
Economists polled by Reuters had forecast payrolls advancing by 135,000 jobs, with estimates ranging from 50,000 to 185,000.
The unemployment rate ticked up slightly to 4.2%, from 4.1% last month, according to the Bureau of Labor Statistics. Analysts had expected the rate to remain unchanged.
Businesses have been hesitant to hire because of an uncertain trade policy. That caution could give way to job cuts after Trump unveiled on Wednesday a 10% minimum tariff on most goods imported into the US, unleashing threats of retaliation and rattling global financial markets.
Economists estimated that Trump’s sweeping import duties had boosted the nation’s effective tariff rate to the highest level in more than a century. They warned of snarled supply chains and high prices, culminating in layoffs as spending by both households and consumers retrenches.
The payroll report could offer some short-term relief to financial markets roiled by the import duties.
Data and sentiment surveys have suggested the economy stalled in the first quarter because of trade policy uncertainty and winter storms. Gross domestic product growth estimates for the first quarter are below a 0.5% annualized rate, with high odds of a contraction.
Economists are not ruling out a recession in the next 12 months.
They expect the effects of the reciprocal tariffs could be evident as soon as with April’s employment report. Retail payrolls are most likely to decline as consumers hunker down amid price increases.
Financial market expect the Federal Reserve to resume cutting interest rates no later than June after pausing its policy easing cycle in January. Central bank officials last month projected two interest rate cuts this year. The Fed’s policy rate is currently in the 4.25%-4.50% range.
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