March 2025 Employment Report

The U.S. economy added 228,000 jobs in March according to the Bureau of Labor Statistics (BLS) survey of employers. The increase was above expectations for a gain of 140,000.  Job gains in the prior two months were revised lower by 48,000. The economy added 152,000 jobs on average over the trailing 3 months versus a 195,700 average one year ago. The BLS highlighted monthly job gains in health care (+54,000), retail (+24,000) and transportation/warehousing (+23,000). Non-postal service Federal jobs fell by 3,200 during the survey period and are lower by 10,100 over the trailing two-month period. The BLS noted that employees on paid leave or receiving ongoing severance pay are counted as employed. Actions taken by DOGE have not had a material impact on payrolls, but recent announcements of planned layoffs suggest this component of labor will be a headwind going forward.

The BLS’s survey of households reported an increase in the unemployment rate to 4.2% in March from 4.1% in the prior month. The size of the U.S. labor force increased by 232,000 while the survey of households revealed an increase in the number of unemployed individuals by 31,000.

Average hourly earnings — a proxy for wage growth — rose 0.3% for the month and 3.8% vs. a year ago. March data matched consensus expectations and February was revised lower by 0.1%.  The 3-month annualized rate of wage growth stood at 3.6% from 4.3% a year earlier.

Source: Bloomberg, US Bureau of Labor Statistics.

Bottom line

The employment data, while better than expected, is taking a back seat to concerns over trade and future estimates of economic growth. Markets are focusing on higher tariffs announced on Wednesday and retaliatory measures from China rather than the condition of the U.S. labor market in March. The data does, however, serve as a reminder that US households are in a relatively strong position heading into the new phase of global trade relationships. U.S. equity futures were down sharply on the trade response from China and were off of their lows following the employment data. Markets had increased their expectations for rate cuts prior to today’s release and the data did little to change those expectations.

Gary Pzegeo, CFA,is co-chief investment officer of CIBC Private Wealth. His responsibilities include chairing the Asset Allocation Committee and overseeing the investment administration, portfolio oversight, and fixed income and equity trading functions.