It's the first Friday of the month, so you know today's column is all about jobs. 

The Line: Job Growth Much Higher than Expected in March

Payrolls rose by 228,000 last month, easily beating the Dow Jones estimate of 140,000. Here are the other highlights of the March jobs report:

• The unemployment rate ticked up to 4.2%, while economists expected it to stay at 4.1%.

• Job growth last month was led by health care (+54,000) and retail trade (+24,000).

• Federal employment declined by just 4,000 in March after falling by 11,000 in February. The reason these numbers aren’t higher is that people receiving severance pay are counted as employed in the payroll survey.

• Employment in January and February was revised downward by a total of 48,000 jobs.

• Wages rose by 0.3% in March and were 3.8% higher than a year ago. The monthly increase matched forecasts while the annual increase was slightly below expectations.

The headline here is that the labor market remains strong, with solid job and wage growth combined with a low unemployment rate. We also found out this week that initial claims for unemployment fell last week to 219,000, which is a very low number. While the latest data on job openings showed a slight decline in February to 7.6 million, that’s still a very high number.

While the March data on the labor market is all good, the future is a lot more concerning. According to Challenger, Gray & Christmas, the number of layoffs announced in March was the highest amount since the pandemic. We’ve also seen a sharp decline in consumer sentiment, with two-thirds of respondents saying they expect higher unemployment in the next year.

So, which data do we believe? I’d say both for now. How can I be so non-committal? Easy, I’m an economist. My view is the past is the past, and the future doesn’t always work out as expected. The one thing we can be certain about these days is more uncertainty.

The takeaway here is that hiring was stronger than we thought in March, but don’t expect it to stay that way in the coming months. That doesn't mean we are headed for a recession, but with all the turmoil in the stock market due to the ongoing trade war, we can’t rule one out either. Welcome to my world.

One good thing that’s come out of all this craziness is the decline in the 10-year Treasury rate, which fell below 4% after the jobs report came out this morning. Since the 10-year Treasury is the biggest driver of mortgage rates, this is good news for the housing market. Why is the 10-year rate going down after a much better-than-expected jobs report? The answer is that right now recession fears are greater than inflation fears.

To sum up:

1. The March jobs report was good news, at a time when we really needed some.

2. Much of the excitement from the report was overshadowed by China’s announcement of a 34% retaliatory tariff on all goods imported from the U.S.

3. There’s a lot of pessimism and recession talk out there, which isn’t going away anytime soon.