Healthcare leads US job gains; CEO turnover rises; Manufacturing activity declines

U.S. employers added a better than expected 228,000 jobs in March, led by healthcare providers, though the national unemployment rate reached 4.2%, up from 4.1% in the prior month. Analysts said the impact on interest rates was yet to be seen as the Federal Reserve gauges other matters including the effects of new tariffs on inflation.

The latest Labor Department numbers showed healthcare firms added 54,000 jobs from the prior month, with retail companies and social assistance providers adding 24,000 and transportation and warehousing firms increasing by 23,000. Federal government employment declined by 4,000 in March after a loss of 11,000 jobs in February amid nationwide cuts in several agencies.

The Associated General Contractors of America said construction employment increased 13,000 in March, as pay increases outpaced wage gains for production workers in the overall private sector. “However, as steep new tariffs and foreign countries’ retaliatory measures take effect, building costs will rise and projects will be put on hold, posing a threat to employment,” Ken Simonson, the trade group’s chief economist, said in a statement.

With the Federal Reserve’s next rating-setting meeting slated for May 6-7, March’s stronger than expected job gains will give the Fed “space to keep policy on extended hold” as it monitors the impact of new tariffs on inflation, Oxford Economics Lead U.S. Economist Nancy Vanden Houten said in a statement. The forecasting firm expects tariffs to push annual inflation close to 4% this year, well above the Fed’s 2% target for optimal inflation.

CEO changeovers at U.S.-based companies increased 11% in February from the prior month, reaching 247 and posting the second-highest total for any month since Challenger, Gray & Christmas began tracking turnover in 2002.

“Companies appear to be reacting to the barrage of indicators suggesting the potential for difficult time ahead, including consumer confidence, the impact of tariffs and rising prices,” Andrew Challenger, senior vice president at the Chicago-based outplacement firm, said in a statement.

Final March data has not been compiled, but the firm tracked 469 CEO departures in the first two months of 2025, up 6% from the same period of 2024. The government-nonprofit category led for turnovers with 98 year-to-date including 47 in February; with technology at 56 for the year including 31 in February. Government and technology were also among the leading categories for 2025 workforce cuts in Challenger’s latest tracking.

CEO changeovers remain less frequent at real estate service companies, with eight exits year-to-date including three in February. Construction had 13 changeovers including four in February, and retail had 13 year-to-date including eight in February. 

U.S. manufacturing activity declined in March based on several metrics after two straight months of expansion, as analysts watched for longer-term impacts of U.S. efforts to boost domestic production through sweeping trade tariffs on imported goods.

The latest index from the Institute for Supply Management, based on nationwide surveys of corporate purchasing managers, showed manufacturing posting at 49 for March, down 1.3 points from the prior month. Numbers below 50 indicate contraction and those above 50 reflect expansion, as the trade group gauges factors such as new orders, employment, supplier deliveries and pricing.

“Demand and production retreated and destaffing continued, as panelists’ companies responded to demand confusion,” Timothy Fiore, chair of ISM’s business survey committee, said in a statement. “Price growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery slowdowns and manufacturing inventory growth.”

Oxford Economics Senior U.S. Economist Matthew Martin said manufacturing slipped back into contraction territory in March as last fall’s post-election boost to business sentiment, based on expected tax cuts and deregulation, gave way to uncertainty over trade tariffs and other federal policy shifts. Factors such as rising inventory “mostly reflect front-loading ahead of tariffs rather than a sign of stronger future demand,” Martin said in a statement.