The U.S. labor market appears to be settling out to a “healthy” level following recent years of ups and downs, but the latest tariffs announcement has economists uncertain for the future.
The U.S. added 228,000 jobs in March, and the unemployment rate rose ever so slightly to 4.2% (up from 4.1% in February), according to the latest Employment Situation Summary from the Bureau of Labor Statistics.
Realtor.com® Chief Economist Danielle Hale stated that this month’s data shows that the “labor market has cooled back to pre-pandemic pace,” adding that “today’s data reflects a still fairly healthy labor market.”
The largest job gains were in healthcare, social assistance, transportation, and warehousing and retail trade.
National Association of REALTORS® (NAR) Chief Economist Lawrence Yun said in a statement that job numbers are a lagging indicator of the economy, while agreeing that the report is still a positive.
“The future direction of the economy remains uncertain due to tariff wars and potential negotiations,” he said. “In states with faster job additions, particularly in the Rocky Mountain time zone and the Southern states, home sales could increase significantly.”
Lisa Sturtevant, Bright MLS chief economist, said in a statement that the “surprisingly upbeat” report “could be the last strong one for a while.”
“The stock market has had its biggest losses since 2020. The expected impacts of the administration’s tariffs, along with general economic uncertainty, will mean that businesses will hold back on hiring, and individuals and families will hold back on spending,” she said.
Healthcare added 54,000 jobs in March, in line with the average monthly gain of 52,000 over the prior 12 months. Employment continued to trend up in ambulatory healthcare services (up 20,000), hospitals (17,000), and nursing and residential care facilities (17,000).
Social assistance jobs increased by 24,000, higher than the average monthly gain of 19,000 over the prior 12 months. Individual and family services added 22,000 jobs.
Employment in transportation and warehousing rose by 23,000 jobs, about double the prior 12-month average gain of 12,000. Job gains in couriers and messengers (16,000) and truck transportation (10,000) were partially offset by a job loss in warehousing and storage (down 9,000).
Retail trade added 24,000 jobs, but changed little year-over-year. Workers returning from a strike led to a gain in jobs at food and beverage retailers (21,000). General merchandise retailers lost 5,000 jobs.
On the opposite end of the spectrum, federal government unemployment saw another decrease, losing 4,000 jobs in March (following a loss of 11,000 in February). Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni said this decrease was “unsurprising” given the recent work of DOGE.
Average hourly earnings for all employees on private nonfarm payrolls rose by 0.3% to $36—increasing 3.8% year-over-year. In terms of private-sector production and nonsupervisory employees, average hourly earnings grew 0.2% to $30.96.
This month’s jobs report follows shortly after the Trump administration’s announcement of the implementation of its tariff plan. Economists have expressed much uncertainty over future jobs data and other economic reports as a result of these historic global tariffs.
Fratantoni noted that following the tariff announcement and coinciding stock market drop, “this data is likely not capturing the moment with respect to the actual strength of the economy.”
“However, the Federal Reserve, in data-dependent mode, is likely to remain cautious with respect to any rate cuts so long as inflation is above target, and the job market data continues to come in strong,” he said.
Yun added that many other shifts will be incoming, and we need to “be prepared.”
“Interest rates on FHA and VA loans could soon drop below 6% in a matter of days. Rates on conventional and jumbo loans are also declining as money shifts from stocks to bonds,” he said. “The current job additions and decreasing rates are likely to lead to more home sales.”
On the other hand, Sturtevant said that the timing isn’t great for this kind of economic volatility and uncertainty as people are making housing decisions.
“Spring is also typically when the housing market heats up, but growing weakness in the labor market, drops in the stock market and general ongoing economic uncertainty are likely going to lead to a slower-than-expected spring housing market,” she predicted. “The tariff announcements sent mortgage rates lower, but those lower rates may be cold comfort to prospective buyers who are increasingly worried about job security and inflation.”
