Tariff Turmoil Overshadows Strong March Jobs Report: What the Experts Are Saying

The March jobs report came in stronger than expected, underscoring strength in the labor market. While this would typically be good news for the Fed, the heightened uncertainty from President Donald Trump's trade war could have the central bank cutting interest rates sooner rather than later.

According to the Bureau of Labor Statistics, nonfarm payrolls rose by 228,000 in March. This was higher than both the upwardly revised February figure of 117,000 new jobs as well as the 140,000 economists expected. January jobs growth was revised down by 14,000.

Job gains in March were seen across the health care (+54,000), social assistance (+24,000), transportation and warehousing industries (+23,000), and retail trade (+24,000). However, government employment declined by 4,000, which followed an 11,000 drop in February.

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The unemployment rate, which is calculated from a separate survey, ticked higher to 4.2% from 4.1% in February.

The data also showed that wage growth was up 0.3% month over month in March and 3.8% year over year.

"Today's better-than-expected jobs report will help ease fears of an immediate softening in the U.S. labor market. However, this number has become a side dish with the market just focusing on the entrée: tariffs," says Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management.

Indeed, the stock market suffered its worst single-day sell-off since the start of the COVID-19 pandemic on Thursday, April 3, with investors spooked by President Trump's sweeping reciprocal tariff announcement.

And the stock market opened sharply lower again on Friday, April 3, after several countries – including China – announced retaliatory tariffs on the United States.

Fears of an economic slump have futures traders ramping up rate-cut expectations. According to CME FedWatch, they are now pricing in a 43% chance the Fed lowers the federal funds rate by a quarter-percentage point at its next meeting in May – up from 18% one week ago.

With the March jobs report now in the books, here's some of what economists, strategists and other experts around Wall Street have to say about the results and what they could mean for investors going forward.

Experts' takes on the March jobs report

"The solid March jobs report highlights an economy that remains resilient despite sticky inflation, a drop in consumer confidence and uncertainty surrounding the impacts from recently introduced tariffs. With inflation stuck well above the Federal Reserve's 2% target and uncertainty over tariffs, the Fed is unlikely to cut rates anytime soon, and may only begin to reevaluate this position should the job market deteriorate more significantly." – Joe Gaffoglio, CEO and President at Mutual Of America Capital Management

"On a day when good news doesn't matter, we saw an encouraging improvement in the job market. Unfortunately, the market is no longer focused on the jobs market and focused squarely on tariffs and trade wars as the U.S. plays chicken with the rest of the world, potentially beginning a downward spiral into a worldwide recession. There is still time for cooler heads to prevail and back off from the brink, but the current path is toward lower economic growth and an increased risk of recession." – Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management

"Employment was much better than expected in March as the private service-providing sector recovered from two of the coldest months since the 1980s. While this number was much higher than expected, markets are still reeling from the tariff announcement earlier this week. The only negative news from this report was the slight increase in the rate of unemployment." – Eugenio J. Alemán, Chief Economist, and Giampiero Fuentes, Economist at Raymond James

"While there is a sense that everything remains frozen in place as businesses exercise caution in response to ongoing economic uncertainty, this month's employment reading is a sign that the U.S. labor market remains resilient through the first quarter of 2025. As the labor market slowly adjusts to a new macroeconomic environment, with ramped-up tariffs' labor-market effects beginning to bite in the coming months, the long-term outlook remains uncertain, and this month's gains might represent a one-off reading rather than a positive trend." – Dr. Edward Hearn, Ph.D., lead economist at UKG

"Strong payrolls, with 228k beating expectations of 140k, is hardly a counterpunch to tariff news and the focus is already shifting to next month's NFP report. In the fine print, average hours and earnings held up while unemployment ticked up to 4.2%. This data serves as a reminder of the underlying strength of the U.S. economy, but continued prints like this could be bad news for the level of Fed cuts currently priced in." – Adam Hetts, Global Head of Multi-Asset at Janus Henderson Investors

"The March monthly jobs report came in much higher than forecast. On the surface, this appears to be a bullish number, but it is important to understand that this is backward-looking data. Markets are going to be much more concerned with incoming, future data, and our concern here is that the higher-than-expected tariffs are going to lead to a major slowdown in hiring and the labor market. We believe that investors should remain positioned very defensively, with well above average cash levels, and defensive positions in U.S. Treasury bonds and gold." – Larry Tentarelli, Chief Technical Strategist for Blue Chip Daily Trend Report

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