U.S. March Jobs Report Beats Expectations, Unemployment Steady at 4.2%

Robust Payroll Growth Signals Labor Market Resilience

U.S. nonfarm payrolls rose by 228,000 in March, surpassing the prior 12-month average of 158,000 and indicating sustained labor market strength. The unemployment rate remained unchanged at 4.2%, consistent with its recent range since mid-2024. The report reflects a broadly steady labor environment, despite softness in certain sectors and downward revisions to prior months.

Sector-Specific Gains Led by Health Care and Transportation

Health care remained a key growth engine, adding 54,000 jobs in March, slightly above its 12-month trend. Employment increased across ambulatory care services (+20,000), hospitals (+17,000), and nursing and residential care facilities (+17,000). Social assistance contributed 24,000 jobs, led by individual and family services (+22,000), marking an uptick from its recent monthly pace.

Transportation and warehousing also outperformed, with a 23,000-job gain—nearly double the sector’s prior monthly average. Couriers and messengers added 16,000 jobs, while truck transportation rose by 10,000. These gains were partially offset by a 9,000-job loss in warehousing and storage.

Retail Employment Rebounds After Strike Impact

Retail trade added 24,000 jobs, largely due to the return of food and beverage store workers (+21,000) following a strike. However, job losses in general merchandise (-5,000) highlight uneven performance across the subsector. Overall retail employment has shown little net change over the past year.

Wage Growth Steady; Prior Revisions Temper Enthusiasm

Average hourly earnings rose by 0.3% to $36.00, with annual wage growth at 3.8%. Production and nonsupervisory workers saw a 0.2% increase to $30.96. While wage trends suggest moderate inflation pressure, downward revisions to January and February payrolls—cut by a combined 48,000—somewhat offset the strength of March’s headline gain.

Labor Force Metrics Unchanged; Participation Stalls

The labor force participation rate held at 62.5%, while the employment-population ratio remained at 59.9%. Long-term unemployed totaled 1.5 million, making up 21.3% of total unemployment. Part-time employment for economic reasons and the number of discouraged workers also showed minimal movement, pointing to underlying labor market stability rather than momentum.

Market Forecast: Bullish for Near-Term Equities, Neutral for Rates

Stronger-than-expected job creation, particularly in service sectors and logistics, supports a short-term bullish outlook for U.S. equities. However, with wage growth and inflation risks contained, the data are unlikely to alter Fed rate expectations materially. Traders should monitor upcoming inflation data for confirmation, but current labor trends favor risk-on positioning.

More Information in our Economic Calendar.