Strong Jobs Report Offers Hope ? But Will It Be Enough To Counter Tariff Turmoil?

As Wall Street crumbles from the impact of tariffs, cracks are still not visible in the U.S. labor market, which continues to show resilience and defies investor fears of economic weakness.

In March, nonfarm payrolls surged by 228,000, the Bureau of Labor Statistics reported Friday. The outcome is well above the three-month average of 195,000 and topped economists' forecasts of 135,000. February’s employment growth was downwardly revised to 117,000.

Private sector payrolls surged by 209,000, the highest since December 2024. Employment rose in health care, social assistance, and transportation and warehousing. Retail trade also saw job gains, partly due to the return of workers following a strike.

Public sector payrolls surprisingly rose by 19,000, slightly quelling fears of DOGE-related layoffs filtering into the data.

Meanwhile, the unemployment rate unexpectedly inched higher from 4.1% to 4.2%, defying expectations for no change.

Wage growth broadly matched expectations. Average hourly earnings increased 0.3% from February's pace, as predicted, and rose 3.8% year-over-year, marginally lower than the 3.9% predicted.

Market Reactions

Markets were already in a state of extreme volatility ahead of Friday's jobs report, as tensions escalated between the U.S. and China.

Beijing unveiled a retaliatory 34% tariff on U.S. goods?mirroring the rate announced by President Donald Trump on Wednesday?deepening fears of a full-blown trade war.

Futures tied to the S&P 500?tracked via the SPDR S&P 500 ETF Trust ?slid 2.5% by 8:35 a.m. ET, following a 4.9% rout the previous day.

Nasdaq 100 futures dropped 2.6%, putting the tech-heavy index on course for its sixth consecutive weekly loss. The VIX ? also known as “market fear gauge” ? was up 34%.

U.S. Treasury yields tumbled as investors fled to safe-haven assets. The yield on the 10-year note fell 15 basis points to 3.88%, marking its lowest level since late September 2024.

Rate cut bets gained traction. Traders now assign a 40% probability to the Federal Reserve lowering interest rates as soon as May, according to the CME FedWatch Tool. Yet, they see June as the most likely month for the next rate cut, applying a 100% likelihood.

Investors now await remarks from Fed Chair Jerome Powell, who will hit the wires at 11:25 a.m. on Friday.

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