The unemployment rate is a measure of the percentage of the total labor force that is unemployed but actively seeking employment and willing to work. It’s a key indicator of the health of the labor market and the economy. For example, an unemployment rate of 4.2% means that 4.2% of the people who are able and willing to work are currently without a job.
Nonfarm payrolls refer to the total number of paid workers in the U.S. excluding farm employees, government employees, private household employees, and employees of nonprofit organizations. This statistic is reported monthly by the U.S. Bureau of Labor Statistics and is a critical indicator of economic health. An increase in nonfarm payrolls typically signals economic growth and means more jobs creation.
Employment Situation – March 2025
Total nonfarm payroll employment rose by 228,000 in March, exceeding the prior 12-month average gain of 158,000. The unemployment rate rose slightly to 4.2%, with 7.1 million unemployed individuals. This marks a steady range of 4.0% to 4.2% since May 2024.
Household Survey Insights
Unemployment rates across demographic groups remained stable in March. The long-term unemployed (jobless for 27 weeks or more) accounted for 21.3% of total unemployed individuals, at 1.5 million. The labor force participation rate and employment-population ratio held steady at 62.5% and 59.9%, respectively.
Part-time employment for economic reasons remained stable at 4.8 million, as did the number of people not in the labor force who expressed a desire to work, at 5.9 million.
Establishment Survey Insights
Significant job growth occurred in key sectors:
- Health care: +54,000 jobs, driven by ambulatory health care services, hospitals, and nursing/residential care facilities.
- Social assistance: +24,000 jobs, including 22,000 in individual and family services.
- Transportation and warehousing: +23,000 jobs, led by couriers and messengers and truck transportation.
Retail trade saw an increase of 24,000 jobs, attributed to workers returning from strikes in food and beverage retail, while general merchandise retail experienced a loss .
Federal government employment declined by 4,000, continuing a downward trend from February.
Employment in other industries such as mining, manufacturing, and professional/business services showed little change.
Earnings and Hours
Average hourly earnings for private nonfarm payroll employees rose by $0.09 (0.3%) to $36.00 in March, reflecting a 12-month increase of 3.8%. Earnings for production and nonsupervisory employees edged up by $0.05 (0.2%) to $30.96.
The average workweek remained unchanged at 34.2 hours for private nonfarm payroll employees. In manufacturing, the workweek also held steady at 40.2 hours, with overtime unchanged at 2.9 hours. Production and nonsupervisory employees saw an increase of 0.2 hours to 33.8 hours.
Impacts of Report on Stock Market
Tariff concerns have taken the spotlight over positive labor market data. Uncertainty around tariffs and their impact on global trade, including possible retaliation, has increased fears of a slowdown and made investors more cautious.
Even though the Nonfarm Payroll (NFP) report showed strong job growth and a steady unemployment rate over the past year, these positive indicators might not be enough to counterbalance the anxiety caused by trade tensions.
This job report is fundamentally strong, showing steady growth and resilience in the labor market. If tariff concerns ease, investors might shift their focus to these positive economic indicators and respond more favorably. Monitoring potential support levels could offer key opportunities for navigating market trends as sentiment adjusts.
