Job Growth Surges Despite Tariffs and Federal Cuts
- Andrew Schneider
- 7 days ago
- 2 min read
The March jobs report showed an uptick of 228,000 jobs, despite tariffs, 4.2% unemployment, and DOGE cuts. This is a rebound compared to the previous two months of slower job growth. Economists project the rebound is due to adverse effects of worker strikes on payrolls in January and February. Additionally, the labor market earlier this year was even weaker than believed, with the bureau correcting additions for those two months by a total of 48,000—making a meager 111,000 jobs added in January, and 117,000 added in February. Leading industries in the growth were healthcare, leisure and hospitality, and retail.
How did DOGE affect the jobs report? Morgan Stanley estimated cuts from Elon Musk’s Department of Government Efficiency (DOGE) would shave a total of 25,000 jobs off federal employment this month. However, DOGE ultimately had a smaller impact than anticipated, and the estimated job losses did not materialize this month. The short fall is likely due to the legal challenges of firing federal workers, says Thomas Ryan of Capital Economics. 75–80,000 federal workers who took DOGE buyouts are still being paid and are expected to be taken off government rolls by fall.
This month's jobs report was overshadowed by Trump's announcement of tariffs being put into place on Wednesday, causing fears of the American economy dipping into recession. In such times, it is refreshing to hear a positive report come from the government. Gregory Daco, EY chief economist, says, “The March jobs report is reassuring in the sense that, as we've been highlighting, we still have fairly robust fundamentals on the eve of what may be a significant economic slowdown resulting from the tariffs.”
Though the wage growth that would be affected by his tariffs won't be reported until next month, it is a positive sign that the economy won't tip into despair. The unemployment increase is only 0.1%, up to 4.2% total. Average hourly earnings gained 0.3%, and annual wages increased 3.8%, showing the healthy conditions of the economy last month.
The news of the employment data comes at a time of uncertainty of what will come next within the economy, marking a sense of ease over the country. Americans will be watching their wallets to see what comes next for the market and broader economy.
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