As newly announced trade tariffs rattle markets, the U.S. labor market stands as the last major pillar of strength in an economy increasingly defined by President Donald Trump‘s policy decisions.
The Bureau of Labor Statistics will release the March Employment Situation at 8:30 a.m. ET on Friday, offering a critical read on whether hiring momentum is holding up—or if mounting government layoffs are beginning to weigh on the broader labor market.
March Nonfarm Payrolls: What Are Economists Expecting?
Consensus forecasts tracked by TradingEconomics anticipate a slowdown in hiring, with total nonfarm payrolls expected to rise by 135,000, down from the 151,000 jobs added in February.
Job gains over the past 6 and 12 months have averaged 175,000 per month, suggesting a cooling trend is underway. The latest ADP employment report—which covers a subset of more than 25 million private-sector employees—showed a gain of 155,000 jobs in March.
Government hiring remains a key risk factor. Public-sector payrolls rose by just 11,000 in February, and economists warn the figure could turn negative for the first time since April 2024. Government hiring has averaged 33,000 jobs per month over the past year, and—with the exception of April 2024—has not recorded a monthly decline since December 2022.
The unemployment rate is expected to remain steady at 4.1%.
Wage growth is seen as relatively flat. Average hourly earnings are projected to increase 0.3% month-over-month, matching February’s pace, and rise 3.9% year-over-year—a slight deceleration from the previous month’s 4%.
What Are The Experts Saying?
“Although they may feel somewhat irrelevant in the context of the tariff announcements made on ‘Liberation Day,’ March nonfarm payrolls are incredibly important,” said Julien Lafargue, chief market strategist at Barclays Private Bank.
“With recession fears mounting, a weaker-than-expected print could be a nail in the coffin for the U.S. economy.”
Lafargue cautioned that even a strong report might be dismissed as outdated, given the potential impact of fresh tariffs. “It feels like a lose-lose situation for markets. Yet, that may be the silver lining—expectations are so low that a decent print could still trigger a short-term rebound.”
ADP Chief Economist Nela Richardson noted that despite policy uncertainty and weak consumer sentiment, “the March topline number was a good one for the economy and employers of all sizes—even if not all sectors.”
Comerica forecasts a modest 110,000 increase in payrolls, with the unemployment rate ticking up to 4.2%. Bank of America is more bullish, predicting a 185,000 gain, viewing a hiring rebound in the leisure and hospitality sector after cold weather disruptions earlier this year.
Bank of America doesn’t see government job cuts as a drag on the overall figure, noting that jobless claims have remained stable in recent weeks. “
Given the muted claims data in the survey week, we do not expect DOGE-driven job cuts to be a sizable drag,” said economist Shruti Mishra.
Goldman Sachs’ Ronnie Walker estimates a 150,000 gain in nonfarm payrolls, slightly above consensus but below the recent three-month average of 200,000. Walker highlights the end of worker strikes and a rebound in weather-sensitive industries as tailwinds, while anticipating a 25,000 drag from federal job cuts and slower state and local hiring.
Yet, a cold dose of reality came from the ISM Services PMI for March, which revealed a sharp slowdown in hiring activity, with the employment subindex dropping to a 9-month low.
Pessimism Reigns Supreme Ahead Of Jobs Data
Markets are in open revolt over President Trump’s decision to impose country-specific trade tariffs—measures that exceeded even the bleakest forecasts from economists.
The S&P 500 Index – tracked by the SPDR S&P 500 ETF Trust SPY – fell by 4.2% on Thursday, reaching a 7-month low.
Against this backdrop, a solid March payrolls report—showing firms are still hiring and retaining workers—could serve as an anchor, giving traders a reason to cling to hopes that the U.S. labor market remains resilient amid growing tariff headwinds.
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