US unemployment rate jumps to 4.2% as JPMorgan raises 2025 recession odds to 60%

The unemployment rate in the U.S. just hit 4.2%, up from 4.1% the month before. That’s not what Wall Street wanted to hear. It’s also higher than the 4.1% estimate economists had expected. This data came out Friday from the Bureau of Labor Statistics, and it’s already making markets twitch.

But here’s the twist: even with that rise in unemployment, job growth was stronger than anyone predicted. The Labor Department said nonfarm payrolls rose by 228,000 in March. That’s a big jump from 117,000 in February.

It also beat the Dow Jones estimate of 140,000. The labor market looks weird right now—strong hiring on one side, rising joblessness on the other. And it all just makes Jerome Powell’s job that much harder.

Markets crash as China hits back with tariffs

Wall Street is taking punches. On Friday morning, Dow Jones futures dropped 1,200 points, or 3%, before the opening bell. When trading officially opened, the Dow was down nearly 1,500 points. That came right after a brutal 1,679-point drop on Thursday.

S&P 500 futures fell 3%, on top of Thursday’s 4.84% crash. Nasdaq 100 futures slipped 2.8%, with big tech names bleeding thanks to their exposure to China. The markets are panicking over a growing trade war, and crypto folks are already sniffing blood in the water.

The panic started with tariffs. President Donald Trump announced new tariffs this week, and China fired back fast. Late Thursday, China’s finance ministry said it would slap a 34% tariff on U.S. imports in retaliation. That hit like a freight train.

What’s worse? The White House keeps sending mixed signals about whether the new tariffs could be dialed back. One day, it’s negotiable, the next day it’s not. No one knows what Trump is thinking, and that’s part of the problem.

Tariffs complicate unemployment outlook

JPMorgan’s top economist, Bruce Kasman, dropped a research note late Thursday that:

“These policies, if sustained, would likely push the U.S. and possibly global economy into recession this year.”

He bumped up his 2025 recession odds from 40% to 60%. Kasman said a U.S. recession could happen even if the rest of the world avoids it. According to his note, “Scenario where rest of world muddles through a US recession possible but less likely than global downturn.”

Kasman also pointed out that the U.S. economy had already started slowing at the end of 2024 and into early 2025. Back in February, the unemployment rate was still holding at 4.1%, which isn’t bad in historical terms. But that was before the tariffs. That was before China hit back. Now things are different.

Kasman wrote, “The current positioning of the US and global expansion points to limited vulnerability that might suggest a relatively mild downturn. But recessions are inherently unpredictable.” That’s economist talk for “it could be mild… or not. Who knows.”

Meanwhile, in a post on Truth Social Friday morning, Trump wrote in all caps: “TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE. THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!”

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