CIO Notebook: Payrolls To The Wings As Tariffs Take Center Stage

2025-04-08 07:58:00 ET

Summary

• March’s non-farm payrolls release came in well above consensus expectations, up +228k versus the estimate for +140k. Driving the print were notable gains in health care (+54k), social assistance (+24k), retail trade (+24k), transportation & warehousing (+23k), and government (+19k).
• Wage growth came in on target, up +0.3% month-over-month and +3.8% year-over-year, continuing the cooling trend in 2025. Employed persons rose by +201k, while unemployed persons rose by only +31k. The participation rate rebounded back to 62.5% from 62.4%, helping to drive the unemployment rate higher to 4.2%.
• As for the market reaction, equity markets are lower, as are Treasury yields as tariffs remain squarely in the crosshairs for investors. In fact, despite the stronger print, markets are still pricing in four rate cuts by October, reflecting lower growth, higher inflation, and higher recession risks on the back of Wednesday’s tariffs announcements.

By Shannon L. Saccocia, CFA, Chief Investment Officer - Wealth

With robust employment levels and strong consumer and corporate balance sheets along with the potential for tariff rates to be negotiated lower, we believe that the U.S. will avoid a recession and a protracted economic deceleration....

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