Labor Market and Economy Report: A Look at Trends in March 2025

Executive Summary

Job Growth

The U.S. economy added 228,000 jobs in March, surpassing expectations. However, revisions to January and February data show that employment for those months is 48,000 lower than initially reported. In March, notable gains occurred in healthcare (+53,600), social assistance (+24,200) and transportation and warehousing (+22,900), while notable declines occurred in federal government (-4,000).

Numerous companies remain hesitant to make further investments or resume hiring until they gain more clarity regarding economic conditions and trade policies. Key industries, such as construction and manufacturing, have experienced less than 2.0% employment growth over the last 12 months. However, the overall growth in U.S. employment points to resilience in the labor market despite these headwinds.

Unemployment and Labor Force Participation

The unemployment rate increased slightly from 4.1% to 4.2% between February and March. The labor force participation rate increased slightly from 62.4% to 62.5%.

Unemployment rates specific to the industries Aston Carter supports were as follows for March: finance and insurance (1.9%) professional and business services (4.8%), hospitals (1.8%), utilities (1.3%), manufacturing (3.3%) and construction (6.4%).

Among skilled labor categories Aston Carter sources talent for, unemployment in business and financial was 2.4% and office and administrative was 3.7%.

Inflation

The year-over-year inflation rate increased by 2.4% between March 2024 and March 2025, falling below February’s reading of 2.8%. “Core” inflation – the consumer price index for all items minus food and energy (two volatile categories) – increased by 2.8% year-over-year, below February’s reading of 3.1%. Both inflation measures dropped significantly in March, but more data is needed to confirm steady progress toward the Federal Reserve's 2.0% target.

Wage Growth

Average hourly earnings increased by 3.8% for the 12 months ending March, below February’s increase of 4.0%. “Real” average hourly earnings (wages adjusted for inflation) increased by 1.4% between March 2024 and March 2025. In other words, average hourly earnings are keeping up with inflation, but consumers may still be feeling the pressure of higher prices.