U.S. employers added 228,000 jobs in March, significantly outperforming expectations and signaling continued resilience in the labor market. The data, released by the Bureau of Labor Statistics on Friday, comes as businesses and investors brace for the potential impact of President Donald Trump’s newly announced tariffs.
March’s job growth exceeded the Dow Jones estimate of 140,000 and represented a strong rebound from February’s revised total of 117,000. However, despite the positive headline number, the national unemployment rate rose to 4.2%—higher than the anticipated 4.1%—as more people entered the workforce.
For small business owners and entrepreneurs, the report provides a mixed picture. On one hand, solid job creation suggests that consumer demand and business activity remain strong. On the other, the rise in unemployment and looming tariff-related pressures could point to emerging headwinds in the months ahead.
Health care remained the leading source of employment gains, contributing 54,000 jobs—consistent with its average over the past year. Other sectors with notable increases included social assistance and retail, which each added 24,000 jobs, and transportation and warehousing, which grew by 23,000 positions. In contrast, federal employment declined slightly by 4,000, despite large-scale workforce reductions attributed to cost-cutting efforts in Washington.
Wages showed steady, if modest, growth. Average hourly earnings rose 0.3% in March, matching expectations. On an annual basis, earnings were up 3.8%, the slowest pace since July 2024. The average workweek remained unchanged at 34.2 hours.
While the job gains offer reassurance about current labor market conditions, revisions to earlier months showed a more tempered start to the year. January’s job count was reduced to 111,000, while February’s figure dropped by 34,000 from its initial estimate.
The report arrives at a volatile moment for the U.S. economy. Earlier this week, President Trump announced a flat 10% tariff on all trading partners, along with broader reciprocal trade measures. The announcement has triggered swift international backlash and rattled financial markets. As a result, many analysts are cautioning that hiring momentum could slow if companies grow more cautious about expansion.
Stock markets reacted cautiously to the employment news, with futures tied to the Dow Jones Industrial Average remaining down sharply and investors seeking refuge in safer assets like government bonds.
Among the broader measures of labor underutilization, the underemployment rate—which includes part-time workers seeking full-time jobs and discouraged workers—fell slightly to 7.9%. The household survey, which is used to calculate the unemployment rate, showed an increase of 201,000 employed individuals in March. Notably, full-time employment rose by 459,000, while part-time positions decreased by 44,000.
While the strong March report reflects ongoing labor market stability, its backward-looking nature leaves open questions about the months ahead. For small businesses, staying agile will be essential as they navigate both economic growth and rising uncertainty tied to the shifts in trade policy.
