WASHINGTON (Reuters) – U.S. job openings dropped sharply in March, but a decline in layoffs suggested that the labor market remained on solid footing despite an ever-shifting tariffs policy casting a pall over the economy.

Job openings, a measure of labor demand, decreased 288,000 to 7.192 million by the last day of March, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday. Data for February was revised lower to 7.480 million open positions instead of the previously reported 7.568 million.

Economists polled by Reuters had forecast 7.480 million vacancies. Hiring rose just 41,000 to 5.411 million, underscoring the reluctance by businesses to increase headcount as they navigate President Donald Trump’s sweeping import duties. Layoffs fell 222,000 to 1.558 million, continuing to anchor the labor market.

Economists expect tariffs will boost prices and snarl supply chains, with a hit to the labor market anticipated in the coming months. A hiring freeze and mass firings of federal workers as part of the Trump administration’s unprecedented campaign to drastically downsize the government also are expected to undercut the labor market’s resilience.

The government is expected to report on Friday that nonfarm payrolls increased by 130,000 jobs in April after rising 228,000 in March, a Reuters survey showed. The unemployment rate is forecast to hold steady at 4.2%.

—

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)