The US economy added a stronger-than-expected 228,000 jobs in March, showing that hiring remained solid even as concerns grew over President Donald Trump’s escalating global trade war, according to government data released on Friday.
The figure, released by the US Labour Department on Friday, marked a sharp increase from the revised 117,000 jobs added in February. While the unemployment rate rose slightly to 4.2 per cent from 4.1 per cent, economists noted that the increase was due to more people entering the labour force, which is typically a positive sign.
“This is likely to be the high-water mark,” said Diane Swonk, chief economist at KPMG, according to The Associated Press (AP). Swonk added that the effects of tariffs, federal job cuts, and economic uncertainty could slow job growth in the coming months.
Where are the jobs?
Health care and social assistance led the job gains with 78,000 new roles, followed by retail, transportation, and warehousing. Restaurants and bars also added around 30,000 positions as the economy bounced back from winter slowdowns.
However, federal jobs declined by 4,000 in March, reflecting the early impact of the Trump administration’s effort to reduce government staffing. According to AP, some economists believe this trend might intensify as Elon Musk, who is advising the administration on federal downsising, continues to implement workforce cuts.
President Trump celebrated the job growth, writing on Truth Social: “GREAT JOB NUMBERS, FAR BETTER THAN EXPECTED. IT’S ALREADY WORKING.” He also declared, “My policies will never change.”
Yet, many economists remain cautious. “The job numbers show the labour market was strong heading into this new policy storm,” AP quoted Seema Shah of Principal Asset Management, as saying. “But everyone knows that economic weakness is coming.”
Story continues below this ad
Financial markets, however, did not share the optimism. Stocks dropped sharply after China announced retaliatory tariffs in response to Trump’s new import taxes, nicknamed “Liberation Day” tariffs. The S&P 500 opened 2.5 per cent lower on Friday, following a major sell-off the day before. The Dow Jones index lost 1,000 points at the opening bell, adding to a 1,600-point drop on Thursday.
Rising risks to economy
According to AP, other looming risks include mass deportations of undocumented workers and the cancellation of government contracts. Many such workers have helped fill labour shortages in recent years, and their removal could hurt businesses, increase wages, and drive up prices.
The job market has cooled from the highs of 2021–2023. Monthly job gains have slowed, from an average of 603,000 in 2021 to 168,000 last year. Still, the economy has remained unexpectedly strong despite high interest rates. The Federal Reserve raised rates 11 times between 2022 and 2023 to fight inflation, but the economy kept growing.
“The US economy is in good shape at the start of the second quarter,” wrote Ershang Liang of PNC Economics, “but the ongoing trade war has increased the risk of near-term recession dramatically.”
© IE Online Media Services Pvt Ltd