APRIL 7, 2025 – HIRING UP IN MARCH, FED CHAIR WORRIES ABOUT TARIFFS
Employers added 228,000 new jobs in March, better than expected in face of the unprecedented government layoffs and economic uncertainty. Economists predicted the addition of 140,000 positions. Job gains for January and February were revised lower, but the average monthly gain over the last 12-months was 158,000 new jobs. Expectations going forward are worse, as tariffs should put a damper on hiring for the near term. The unemployment rate was 4.2 percent, slightly up from February as more people entered the workforce.
On Friday, Fed Chair Jerome Powell said the US economy is likely to face a period of higher prices and weaker growth due to the government’s application of global tariffs. Officials are looking at the future with caution wanting to make sure one-time price increases don’t lead to persistent higher inflation. The central bank expects to wait to cut rates until signs of economic weakness are apparent, rather than following a set path. Economists now expect inflation to rise by at least 1 percent this year. The Fed signaled their focus has shifted to mitigate the damage from an increase in unemployment and a slowdown in spending, only after it happens. This is a marked change from their previous approach to make the rate cuts preemptive.