In March, US nonfarm payroll employment grew by 228,000, exceeding expectations while the unemployment rate held steady at 4.2% for ten consecutive months. However, risks to employment persist, particularly with impending federal layoffs from the Department of Government Efficiency and the introduction of new tariffs. These tariffs could lead to weakened employment growth, especially in the automotive sector, which heavily depends on global supply chains. Consequently, the Federal Reserve is anticipated to maintain current interest rates in May amid these labor market uncertainties.
Nonfarm payroll employment in the US increased by 228,000 in March, surpassing consensus expectations.
The unemployment rate remained little changed at 4.2%, having remained in the 4.0% - 4.2% range for the past ten months.
Significant upside risks to unemployment remain, particularly due to federal government layoffs from the recently established Department of Government Efficiency (DOGE).
Employment growth is expected to weaken as US firms adjust to the new tariffs introduced this week.
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