March Jobs Report: Resilient Job Growth and Stable Inflation Support Economic Optimism

Dr. Bernard E. Anderson, Ph D
Whitney M. Young Jr. Professor Emeritus, The Wharton School, University of Pennsylvania
Senior Economic Advisor, National Urban League

The March jobs report underscores continued strength in the U.S. labor market, with solid job growth, rising wages, and stable inflation. Total nonfarm employment increased by 228,000 last month, reflecting steady consumer demand and continued recovery in key sectors. The unemployment rate rose slightly to 4.2 percent as more workers entered the labor force, pushing the labor force participation rate up to 62.5 percent. The employment-population ratio remained steady at 59.9 percent, and the average workweek was unchanged at 34.2 hours.

The March data also reveal persistent racial disparities in the labor market. While white employment grew by 268,000 and white unemployment fell by 46,000, Black employment declined by 176,000 and Black unemployment rose by 31,000. The Black-white unemployment gap remains at 1.67—lower than the historical 2:1 ratio, but still unacceptably high. These gaps are a stark reminder of the structural inequities that continue to undermine economic security for Black Americans, even amid national job growth.
Job gains were strongest in leisure and hospitality (+43,000), health care (+27,000), and retail trade (+23,000). Employment was largely unchanged in most other major industries. Manufacturing employment declined slightly (-1,000), and federal government employment also fell by 1,000. This modest drop in public sector employment is likely understated due to survey timing, and does not fully reflect layoffs stemming from the Trump administration’s abrupt personnel reductions through the Department of Government Efficiency (DOGE).

Average hourly earnings rose by 3.8 percent year-over-year, supporting household income and reinforcing consumer confidence despite growing concerns over the broader economic outlook. The U-6 measure of underemployment, which includes discouraged and part-time workers, declined to 7.9 percent, while long-term unemployment increased to 1.495 million, representing 21.9 percent of all unemployed individuals.

The current labor market momentum is threatened by the Trump administration’s sweeping tariffs, which have disrupted global trade relationships and raised prices for consumers and businesses alike. A new 25 percent tariff on automobiles and auto parts imported from Canada, Mexico, and the Eurozone is already raising costs, while retaliatory tariffs imposed by trading partners on U.S. agricultural and consumer goods are likely to depress exports and reduce farm income. A similar tariff regime during the prior Trump administration forced the federal government to spend $16 billion in subsidies to support farm families—a pattern that may soon repeat, worsening the federal deficit.
These policies have shaken investor confidence. Stock markets are displaying significant volatility, with the S&P 500, Dow, and NASDAQ all declining from 2024 highs. The U.S. dollar is weakening, and consumer confidence has declined sharply over the last two months, according to both the University of Michigan and U.S. Chamber of Commerce indexes. Meanwhile, the administration’s claims that tariffs will spur domestic manufacturing investment fail to account for the long-term planning and capital needed for such expansion—investment that is being crowded out by fiscal uncertainty and unstable policy.

Despite these challenges, inflation has continued to moderate. The Consumer Price Index (CPI) now stands at 2.6 percent and the Personal Consumption Expenditures (PCE) index is at 2.4 percent, both within reach of the Federal Reserve’s long-term target of 2.0 percent. At its most recent meeting, the Federal Open Market Committee kept the federal funds rate unchanged at a range of 4.25 to 4.50 percent. However, the Fed’s dual mandate of achieving maximum employment and price stability will be increasingly difficult to fulfill if current federal economic policies continue to destabilize markets and suppress long-term growth.

The March report affirms that the economy remains on solid footing—for now. But the first 90 days of the Trump administration’s second term have introduced new economic headwinds that could undermine the recovery. Job growth continues to support economic optimism, but the outlook is increasingly fragile, particularly for communities of color. The National Urban League will continue to monitor labor market trends closely and advocate for economic policies that promote inclusive growth, protect workers, and strengthen long-term opportunity for all.