US jobs growth beats expectations in March

WASHINGTON - The US economy added far more jobs than expected in March, but US President Donald Trump’s sweeping import tariffs could test the labour market’s resilience in the months ahead amid sagging business confidence and a stock market sell-off.

Non-farm payrolls increased by 228,000 jobs in March after a downwardly revised 117,000 rise in February, the US Labour Department said in its closely watched employment report on April 4.

Economists polled by Reuters had forecast payrolls advancing by 135,000 jobs after a previously reported 151,000 rise in February. Estimates ranged from 50,000 to 185,000.

The unemployment rate rose to 4.2 per cent from 4.1 per cent in February. The labour market is being underpinned by low layoffs, generating solid wage gains that are helping to sustain the economic expansion.

But businesses have been hesitant to hire because of an uncertain trade policy. That caution could give way to job cuts after Mr Trump unveiled on April 2 a 10 per cent minimum tariff on most goods imported into the US, unleashing threats of retaliation and rattling global financial markets.

Economists estimated that Mr Trump’s sweeping import duties had boosted the nation’s effective tariff rate to the highest level in more than a century. They warned of snarled supply chains and high prices, culminating in layoffs as spending by both households and consumers retreats.

Mr Trump’s tariffs blitz since returning to the White House has already unnerved businesses, which had cheered his electoral victory in November.

The report could offer some short-term relief to financial markets roiled by the import duties.

Data and sentiment surveys have suggested the economy stalled in the first quarter because of trade policy uncertainty and winter storms.

Gross domestic product growth estimates for the first quarter are below a 0.5 per cent annualised rate, with high odds of a contraction. Economists are not ruling out a recession in the next 12 months.

They expect the effects of the reciprocal tariffs could be evident as soon as April’s employment report.

Retail payrolls are most likely to decline as consumers hunker down amid price increases.

Financial markets expect the Federal Reserve to resume cutting interest rates no later than June after pausing its policy easing cycle in January.

US central bank officials in March projected two interest rate cuts in 2025. The Fed’s policy rate is currently in the 4.25 per cent to 4.5 per cent range. REUTERS