08
April 2025
US unemployment rate ticked up to 4.20% in March 2025
Adriaan Pask
Chief Investment Officer, PSG Wealth
Event
The unemployment rate in the United States rose to 4.20% in March 2025, up from 4.10% in February, slightly
higher than the 4.10% market expectation and the highest level since November 2024.
• Employment rose by 201 thousand to reach 163.51 million, while the number of unemployed individuals rose by 31 thousand to 7.08 million. Additionally, the employment-to-population ratio stayed stable at 59.90%, while the labour force participation rate increased marginally from 62.40% to 62.50%.
• Furthermore, the U-6 unemployment rate, which accounts for people who are only loosely employed and those who work part-time for financial reasons, dropped modestly from 8% in February to 7.90% in March.
The Impact
Following China's announcement of a 34% tariff on all US goods in retaliation for President Trump's broad 54% levy on Chinese imports, US equities fell to their lowest levels since August 2024, continuing their steep declines from their worst day since 2020.
• While the Dow Jones fell more than 1 000 points, the tech-heavy Nasdaq entered bear market territory and the S&P 500 and Nasdaq both fell more than 3%.
• As a result, the US Dollar Index (DXY)increased by approximately 0.37% tor each 102.47points on Friday, 4 April 2025.
• TheUS5-year and 10-year Treasury yielddeclinedto3.59% and 3.92%, respectively while the 30-yearTreasury
yields rose to 4.38% at 16h20 on Friday.
The Assessment
The report indicates that labour market conditions are deteriorating, which reduces the likelihood of the US Federal Reserve implementing aggressive rate cuts.
• Growing uncertainty over trade policy, along with substantial federal government spending cuts, could erode the resilience of the labour market in the coming months. However, we remain optimistic that the markets will weather this uptick, as they have in the past.
• The next US unemployment rate release date is scheduled for Friday, 2 May 2025.