| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Nonfarm Payrolls - M/M | 131,000 | 80,000 to 165,000 | 228,000 | 151,000 | 117,000 |
| Unemployment Rate | 4.2% | 4.0% to 4.2% | 4.2% | 4.1% | |
| Private Payrolls - M/M | 115,000 | 95,000 to 143,000 | 209,000 | 140,000 | 116,000 |
| Manufacturing Payrolls - M/M | 3,000 | -5,000 to 5,000 | 1,000 | 10,000 | 8,000 |
| Participation Rate | 62.5% | 62.4% | |||
| Average Hourly Earnings - M/M | 0.3% | 0.3% to 0.3% | 0.3% | 0.3% | 0.2% |
| Average Hourly Earnings - Y/Y | 4.0% | 3.9% to 4.0% | 3.8% | 4.0% | 4.0% |
| Average Workweek | 34.2hrs | 34.2hrs to 34.2hrs | 34.2hrs | 34.1hrs | 34.2hrs |
Highlights
Nonfarm payrolls are up 228,000 in March, well above the consensus of up 131,000 in the Econoday survey of forecasters. However, a net downward revision of 48,000 to nonfarm payrolls in the prior two months takes some of the shine off the March increase. The monthly average increase in nonfarm payrolls is 152,000 for the first quarter 2025 compared to up 289,000 in the fourth quarter 2024.
Private payrolls are up 209,000 in March with payrolls at goods-producers up 12,000 on gains of 13,000 in construction and 1,000 in manufacturing while mining and logging is down 2,000. Service-providers added 197,000 jobs with the largest share from increases of 43,000 in leisure and hospitality, up 48,000 in trade, transportation and utilities, and up 77,000 in private education and health services.
Government payrolls are up 19,000 in March. The rise is entirely due to hiring of 6,000 and 17,000 at the state and local levels, respectively. Federal payrolls are down 4,000.
Average hourly earnings are up 0.3 percent in March from February. The increase from March 2024 is 3.8 percent, the lest since a year-over-year rise of 3.6 percent in July 2024. Pay increases are still outpacing inflation but the size of increases is slipping lower.
The unemployment rate is up a tenth to 4.2 percent in March, the highest since 4.2 percent in November 2024. While the rate remains consistent with a healthy labor market able to absorb new entrants and the unemployed, it has ticked higher the past two months. There is an increase of 77,000 new entrants to the labor force in March. It is not enough to say the labor market is softening appreciably, but it bears watching. The U6 unemployment rate dips a tenth to 7.9 percent in March but remains at a level where it is more difficult for workers on the margins to find jobs.
The labor force is up 232,000 to 170,591 million in March with the number of employed up 201,000 to 163.508 million and unemployed up 31,000 to 7.083 million.
The participation rate is a tenth higher at 62.5 percent in March and remains in a narrow range of 6.24-6.26 percent for the past six months after 62.7 in September 2024.
Overall, Fed policymakers will find more evidence in this report that the labor market remains solid with only minimal signs of softening in March. They will have the April employment report in hand by the time the FOMC next meets on May 6-7. For the moment, the totality of the data for the labor market points to no immediate worry about meeting the maximum employment side of the dual mandate. In turn, this allows the FOMC to focus on the price data and ensuring that inflation gets back to the 2 percent objective consistent with price stability.
Private payrolls are up 209,000 in March with payrolls at goods-producers up 12,000 on gains of 13,000 in construction and 1,000 in manufacturing while mining and logging is down 2,000. Service-providers added 197,000 jobs with the largest share from increases of 43,000 in leisure and hospitality, up 48,000 in trade, transportation and utilities, and up 77,000 in private education and health services.
Government payrolls are up 19,000 in March. The rise is entirely due to hiring of 6,000 and 17,000 at the state and local levels, respectively. Federal payrolls are down 4,000.
Average hourly earnings are up 0.3 percent in March from February. The increase from March 2024 is 3.8 percent, the lest since a year-over-year rise of 3.6 percent in July 2024. Pay increases are still outpacing inflation but the size of increases is slipping lower.
The unemployment rate is up a tenth to 4.2 percent in March, the highest since 4.2 percent in November 2024. While the rate remains consistent with a healthy labor market able to absorb new entrants and the unemployed, it has ticked higher the past two months. There is an increase of 77,000 new entrants to the labor force in March. It is not enough to say the labor market is softening appreciably, but it bears watching. The U6 unemployment rate dips a tenth to 7.9 percent in March but remains at a level where it is more difficult for workers on the margins to find jobs.
The labor force is up 232,000 to 170,591 million in March with the number of employed up 201,000 to 163.508 million and unemployed up 31,000 to 7.083 million.
The participation rate is a tenth higher at 62.5 percent in March and remains in a narrow range of 6.24-6.26 percent for the past six months after 62.7 in September 2024.
Overall, Fed policymakers will find more evidence in this report that the labor market remains solid with only minimal signs of softening in March. They will have the April employment report in hand by the time the FOMC next meets on May 6-7. For the moment, the totality of the data for the labor market points to no immediate worry about meeting the maximum employment side of the dual mandate. In turn, this allows the FOMC to focus on the price data and ensuring that inflation gets back to the 2 percent objective consistent with price stability.
Market Consensus Before Announcement
Payrolls are seen up by a somewhat muted 131,000 with the jobless rate rising to 4.2 percent from 4.1 percent in February. Private payrolls are expected up 115,000.
Definition
The most closely watched of all economic indicators, the employment situation is a set of monthly labor market indicators based on two separate reports: the establishment survey which tracks 650,000 worksites and offers the nonfarm payroll and average hourly earnings headlines and the household survey which interviews 60,000 households and generates the unemployment rate.
Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.
The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.
Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.
The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.
Description
If ever there was an economic report that can move the markets, this is it! The anticipation on Wall Street each month is palpable, the reactions can be dramatic, and the information for investors is invaluable. By digging just a little deeper than the headline unemployment rate, investors can take more strategic control of their portfolio and even take advantage of unique investment opportunities that often arise in the days surrounding this report.
The employment data give the most comprehensive report on how many people are looking for jobs, how many have them, what they're getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy. Nonfarm payrolls are categorized by sectors. This sector data can go a long way in helping investors determine in which economic sectors they intend to invest.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of opponents of easy monetary policy. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
Importance
The employment situation is the primary monthly indicator of aggregate economic activity because it encompasses all major sectors of the economy. It is comprehensive and available early in the month. Many other economic indicators are dependent upon its information. It not only reveals information about the labor market, but about income and production as well. In short, it provides clues about other economic indicators reported for the month and plays a big role in influencing financial market psychology during the month. Additionally, the Fed has made 6.5 percent unemployment a threshold for considering changes in policy - both for quantitative easing and the fed funds rate. And the Fed has emphasized that it is overall labor market conditions that matter - not just a specific number.
Interpretation
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.
Nonfarm payroll employment indicates the current level of economic activity. Increases in nonfarm payrolls translate into earnings that workers will spend on goods and services in the economy. The greater the increase in employment, the faster is the total economic growth. When the economy is in the mature phase of an expansion, rapid increases in employment cause fears of inflationary pressures if rapid demand for goods and services cannot be met by current production.
When the average workweek trends up, it supports production gains in the current period and portends additional employment increases. When the average workweek is in a declining mode, it probably is signaling a potential slowdown in employment growth-or even outright declines in employment in case of recession.
Gains in average hourly earnings represent wage pressures. It is worth noting that these figures aren't adjusted for overtime pay or shifts in the composition of the workforce, which affects wages on its own. Market participants believe that a rising trend in hourly earnings will lead to higher inflation. But if increased wages are matched by productivity gains, producers likely will not increase product prices with wages because their unit labor costs are stable.
The employment data give the most comprehensive report on how many people are looking for jobs, how many have them, what they're getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy. Nonfarm payrolls are categorized by sectors. This sector data can go a long way in helping investors determine in which economic sectors they intend to invest.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of opponents of easy monetary policy. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
Importance
The employment situation is the primary monthly indicator of aggregate economic activity because it encompasses all major sectors of the economy. It is comprehensive and available early in the month. Many other economic indicators are dependent upon its information. It not only reveals information about the labor market, but about income and production as well. In short, it provides clues about other economic indicators reported for the month and plays a big role in influencing financial market psychology during the month. Additionally, the Fed has made 6.5 percent unemployment a threshold for considering changes in policy - both for quantitative easing and the fed funds rate. And the Fed has emphasized that it is overall labor market conditions that matter - not just a specific number.
Interpretation
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.
Nonfarm payroll employment indicates the current level of economic activity. Increases in nonfarm payrolls translate into earnings that workers will spend on goods and services in the economy. The greater the increase in employment, the faster is the total economic growth. When the economy is in the mature phase of an expansion, rapid increases in employment cause fears of inflationary pressures if rapid demand for goods and services cannot be met by current production.
When the average workweek trends up, it supports production gains in the current period and portends additional employment increases. When the average workweek is in a declining mode, it probably is signaling a potential slowdown in employment growth-or even outright declines in employment in case of recession.
Gains in average hourly earnings represent wage pressures. It is worth noting that these figures aren't adjusted for overtime pay or shifts in the composition of the workforce, which affects wages on its own. Market participants believe that a rising trend in hourly earnings will lead to higher inflation. But if increased wages are matched by productivity gains, producers likely will not increase product prices with wages because their unit labor costs are stable.
