The Employment Situation for March 2025

Editor's Note: This report is based on survey data from February 2025 that was published in March 2025. This is the most recent data available. (Source: Bureau of Labor Statistics)

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US employers added 151 thousand jobs last month, which was just short of the predicted 160 to 170 thousand and just over the 143 thousand jobs initially reported last month, while there was very little movement in the unemployment rate, rising by less than one-tenth of a point to 4.1%.

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There was very little movement in most of the employment metrics, although the employment-population ratio fell by two-tenths of a point to 59.9% - which is only the second time this figure has fallen below 60% since November of 2022 (this ratio was 59.8% in November 2024).

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The biggest changes occurred in the number of people who were employed part-time for economic reasons, which grew by almost 11% from under 4.5 million to over 4.9 million, and the number of people who are unemployed but want a job rose buy more than 7.5% to 5.9 million, which may be the strongest indications of a softening labor market in an otherwise largely stable report.

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The healthcare industry added the largest number of jobs at 52 thousand, which is right in line with the 54 thousand jobs the healthcare industry has added on average each of the previous 12 months.

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The financial services industry added the next largest number of jobs at 21 thousand, which is more than 4 times greater than the 5 thousand job additions the industry had added on average over the last year, while the transportation & warehousing industry added about 18 thousand jobs, well above the current 13 thousand monthly average, and the social assistance industry added about 11 thousand jobs, which is a little less than half of the running monthly average.

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The leisure and hospitality industry recorded a net loss of about 16 thousand jobs, while the retail industry saw a decrease of 6 thousand jobs, and there were about 10 thousand net government jobs lost over the course of the month.

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Average hourly pay rose by about 10 cents to $35.93 per hour (an increase of 0.3%), while the length of the average workweek held steady at 34.1 hours per week. 

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Mployer’s Take

This report represents the first set of employment situation data collected exclusively under the second Trump administration, but the next few months are when we’ll begin really seeing more direct impacts from the resulting changes in policies, and it will take another several months beyond that before many of the tangential effects become more apparent.

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In the meantime, the Chairman of the Federal Reserve says the economy is in good shape, and reiterated the Fed’s wait-and-see approach with interest rate cuts. While the Fed cut rates by a quarter percentage point 3 times next year, and analysts and investors are still predicting another 2 or 3 comparable rate cuts in 2025, the Fed has indicated it is in no hurry to continue cutting rates, especially in light of the 4% annual wage growth over the trailing twelve months. 

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The assumed interest rate cuts may be in part based on the increasing likelihood of economic downturn if not recession on the horizon, which more economists are predicting within the next year than were doing so just a couple of months ago. Should such a downturn materialize, it will likely inspire the Fed to act quickly in bringing down rates.

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While some of the new administration’s federal workforce cuts may be reflected in the data of this latest report, most of the cuts made so far and the impact of those cuts, as well as the complementary private job losses, won’t begin showing up in this report until next month.

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Those disruptions to the labor market combined with uncertainty about consumer goods prices and international trade in part due to tariffs and tariff posturing, have led to predictions of significant GDP contraction of almost 2.5% in the first quarter of 2025 by at least one Federal Reserve Bank. 

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There are a lot of moving parts that will ultimately shape the short-term economic future, and those kinds of dynamic systems are difficult to predict even without so many potential variables in flux both domestically and internationally.

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That said, as more economic analysts are becoming more pessimistic in their predictions, it is worth considering that trend as a data point worth taking into account in its own right, and we'll continue updating the outlook as more data comes in in the coming months.

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Check out the Mployer blog here.