Unemployment Rate Rises Slightly to 4.2 Percent

April 4, 2025 – Employment rose by 228,000 in March as the U.S. unemployment rose slightly to 4.2 percent, according to the most recent U.S. Bureau of Labor Statistics report. The number of unemployed persons was 7.1 million in March. In March, job gains occurred in healthcare, in social assistance, and in transportation and warehousing. Employment also increased in retail trade, partially reflecting the return of workers from a strike. Federal government employment declined. “Today’s better than expected jobs report will help ease fears of an immediate softening in the U.S. labor market,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management. “However, this number has become a side dish with the market just focusing on the entrée: tariffs.”

Among the major worker groups, the unemployment rates for adult men (3.8 percent), adult women (3.7 percent), teenagers (13.7 percent), Whites (3.7 percent), Blacks (6.2 percent), Asians (3.5 percent), and Hispanics (5.1 percent) showed little or no change in March. The number of long-term unemployed (those jobless for 27 weeks or more), at 1.5 million, changed little in March. The long-term unemployed accounted for 21.3 percent of all unemployed people.

The labor force participation rate, at 62.5 percent, changed little over the month and over the year. The employment-population ratio held at 59.9 percent in March. The number of people employed part time for economic reasons, at 4.8 million, changed little in March. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs.

The number of people not in the labor force who currently want a job was essentially unchanged at 5.9 million in March. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.7 million, was essentially unchanged in March. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the four weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, changed little at 509,000 in March.

“While Friday’s jobs report showed that the economy is still adding jobs even with the tariff uncertainty and Federal job cuts, the data is backward looking and doesn’t say anything about how employers might fare over the coming months,” said Glen Smith, chief investment officer at GDS Wealth Management.

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“[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,” EY chief economist Gregory Daco told Yahoo Finance.

Where Job Growth Occurred

• Healthcare added 54,000 jobs in March, in line with the average monthly gain of 52,000 over the prior 12 months. Over the month, employment continued to trend up in ambulatory healthcare services (+20,000), hospitals (+17,000), and nursing and residential care facilities (+17,000).
• In March, employment in social assistance increased by 24,000, higher than the average monthly gain of 19,000 over the prior 12 months. Over the month, individual and family services added 22,000 jobs.
• Retail trade added 24,000 jobs in March, as workers returning from a strike contributed to a job gain in food and beverage retailers (+21,000). General merchandise retailers lost 5,000 jobs. Employment in retail trade changed little over the year.
• Employment in transportation and warehousing rose by 23,000 in March, about double the prior 12-month average gain of 12,000. In March, job gains in couriers and messengers (+16,000) and truck transportation (+10,000) were partially offset by a job loss in warehousing and storage (-9,000).
• Within government, federal government employment declined by 4,000 in March, following a loss of 11,000 jobs in February. (Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)
• Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; information; financial activities; professional and business services; leisure and hospitality; and other services.

The Private Sector

Private sector employment increased by 155,000 jobs in March and annual pay was up 4.6 percent year-over-year, according to the March ADP National Employment Report produced by ADP Research in collaboration with the Stanford Digital Economy Lab. The ADP National Employment Report is an independent measure and high-frequency view of the private-sector labor market based on actual, anonymized payroll data of more than 25 million U.S. employees.

Manufacturing delivered stronger-than-average job gains for the second straight month. Construction hiring slowed. Natural resources and trade, transportation, and utilities lost jobs. Year-over-year pay gains slowed to 4.6 percent for job-stayers and to 6.5 percent for job-changers. The pay premium for job-changers was 1.9 percentage points, matching a series low last seen in September.

“Despite policy uncertainty and downbeat consumers, the bottom line is this: The March topline number was a good one for the economy and employers of all sizes, if not necessarily all sectors,” said Nela Richardson, chief economist, ADP.

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Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media