After the doozy of a week we’ve had, expectations for Friday’s jobs report were low.
Despite that, job gains were surprisingly strong in March. But that could change as employers face several looming challenges, particularly how they’ll be affected by new tariff rates under President Trump.
Diving into the data. Employers added 228,000 jobs in March, the Bureau of Labor Statistics reported, beating the last 12-month average of 158,000, and economists’ estimates. Average hourly wages rose to $36. The unemployment rate edged up slightly to 4.2%.
“We had expected a softer report, so this definitely beats expectations,” Rajesh Namboothiry, SVP at Manpower US, told HR Brew. “We’ll have to unpack this in pockets, and we’ll have to continue to watch closely, watch the markets, watch Fed actions, and all of that. But the report suggests that we are and we continue to be in a fairly resilient job market.”
Healthcare again led on job growth, adding 54,000 jobs last month, slightly above its monthly average of 52,000 over the last year.
“If you’re working in healthcare and you’re in HR and talent, it’s probably still a challenging time for you,” Kory Kantenga, head of economics for the Americas at LinkedIn, told HR Brew, noting that healthcare hiring on the platform is still above prepandemic levels. “It’s one of those areas that has things going for it, like population aging, living longer, spending more money on healthcare.”
Retail trade, burdened by layoffs and slowed hirings in recent data, added 24,000 jobs. Leisure and hospitality added 43,000 jobs, largely driven by gains in accommodation and food services. Transportation and warehousing added 23,000, nearly doubling its 12-month average of 12,000. However, Namboothiry said that he has not seen big gains with his own clients in these industries.
“We’re not quite seeing that yet, when you talk to our large clients, we’re not seeing those signals yet,” he said. “I think it is optimism with uncertainty that’s really where our employers, some of the larger clients, are leaning to. Wait, watch, and understand what’s going on in the market before taking any action.”
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DOGE-led federal workforce cuts also trickled into the jobs data. Federal government employment fell by 4,000 in March, fewer than the 11,000 jobs decline seen in February. That’s quite off from the hundreds of thousands of layoffs that outplacement firm Challenger, Gray & Christmas recorded, but the BLS noted that employees on paid leave or receiving severance pay are still counted as employed in the jobs report.
These workers are also already on the job market: LinkedIn reported a 175% increase in job search activity from D.C.-area federal workers from September through mid-February.
“What that means for HR leaders, talent leaders, is that there’s probably a lot of good talent on the market right now,” Kantenga said. “If you’re interested in that and that kind of talent, where you have people who are specialized and subject matters, now’s the time to look at them.”
Zoom out. Despite optimism from March’s strong job gains, uncertainty over the Trump administration’s tariffs announcement could hit HR’s talent strategies, as companies hold off on hiring until they get more clarity. That’s already starting to show up: LinkedIn reported a 6% slowdown in the hiring rate for March.
“The next couple months are crucial. Employers are going to absolutely watch this very closely, and we are seeing some of those conversations happen with employers around what that uncertainty could lead to in terms of softness and hiring,” Namboothiry said.
That means HR and TA leaders will have to be flexible and prepare to adjust their talent strategies to support whatever changes impact their companies, according to Kantenga.
“HR and talent leaders are likely to probably experience some adjustments,” he said. “It just may be the case that the plans might change, or they have already changed coming down the pipeline. Because maybe there’s exposure to tariffs, maybe there’s some change in policy that they’re contending with, or maybe they’re just worried about a general slowdown in the economy. As a result, they’re going to be adjusting their targets.”