Updated at 9:10 AM EDT

The U.S. economy added a bigger-than-expected tally of net new jobs last month, data indicated Friday, providing markets with a small kernel of relief amid the extended tariff-triggered stock selloff. 

The Bureau of Labor Statistics reported 228,000 new jobs were created in March, a tally that topped Wall Street’s 140,000 forecast and the downwardly revised February reading of 117,000. January’s tally was revised lower to a gain of 111,000.

Average hourly earnings were steady in March, rising 0.3% from the previous month, but slowed to an annual pace of 3.8%, just inside Wall Street’s 3.9% forecast.

The headline unemployment rate, which tracks only those actively seeking new employment, edged higher to 4.2%, while the labor force participation rate rose 0.1 percentage point to 62.5%.

Federal Reserve Chairman Jerome Powell will deliver a keynote address on the U.S. economic outlook later today in Virginia.

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“The solid March jobs report highlights an economy that remains resilient despite sticky inflation, a drop in consumer confidence and uncertainty surrounding the impacts from recently introduced tariffs,” said Joe Gaffoglio, president and chief executive at Mutual Of America Capital Management. 

“With inflation stuck well above the Federal Reserve’s 2% target and uncertainty over tariffs, the Fed is unlikely to cut rates anytime soon, and may only begin to reevaluate this position should the job market deteriorate more significantly.”

U.S. stock futures pared some of their premarket declines following the data release, with futures tied to the S&P 500 indicating a 135-point opening bell slump and the Nasdaq called 480 points higher. The Dow Jones Industrial Average was last called 1,050 lower.

Benchmark 10-year Treasury note yields rose 1 basis point to 3.905% following the data release while rate-sensitive 2-year notes also rose 1 basis point to 3.565%.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.1% lower at 101.911, the lowest since October.

“Unfortunately, the market is no longer focused on the jobs market and focused squarely on tariffs and trade wars as the US plays chicken with the rest of the world, potentially beginning a downward spiral into a worldwide recession,” said Chris Zaccarelli, CIO for Northlight Asset Management in Charlotte. 

“There is still time for cooler heads to prevail and back off from the brink, but the current path is toward lower economic growth and an increased risk of recession,” he added.

Related: Trump tariffs raise U.S. recession and stagflation risks

Earlier this week, data from Challenger Gray showed corporate layoffs in March nearly doubled from a year earlier to 172,010, with the Department of Government Efficiency-led overhaul of the federal workforce accounting for 280,253 layoffs over the past two months. 

Payroll-processing group ADP, meanwhile, reported a firmer-than-expected total of around 155,000 private-sector jobs created, despite the economic uncertainty and a pullback in consumer sentiment.

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However, weakening U.S. growth and the prospect of a near-term recession tied to President Donald Trump’s tariff regime have boosted bets for deeper Federal Reserve rate cuts over the coming year.

The CME Group’s FedWatch now suggests a 42.5% chance of a quarter-point interest-rate reduction in May, up from just 18.5% last week. The figure indicates at least three rate cuts, and possibly four, by early December. 

Related: ADP jobs report suggests little tariff impact on private-sector hiring

“Retaliatory tariffs and slower global trade could weigh on exports and financial markets,” said Nuwan Jayawardana, director of investment research at Acuity Knowledge Partners. 

“This could amplify recessionary risks and push the Fed to provide monetary cushioning, especially if fiscal tools prove to be politically constrained,” he added.

“The most likely Fed path after ‘Liberation Day’ is a pause or further hikes as cost-push inflation plays out,” Jayawardana said. 

“However, a pivot to rate cuts is plausible – and potentially swift – if the tariffs do more economic damage than anticipated.”