(Headline USA) American employers added a 177,000 jobs in April as the job market showed resilience in the face of President Donald Trump’s trade wars.
Hiring fell slightly from a revised 185,000 in March, but that is above economist projections of 135,000 jobs. The unemployment rate remained at a low 4.2%, the Labor Department reported Friday.
Friday’s report showed employment, one of the strongest aspects of the U.S. economy, remains solid, yet many economists anticipate that a negative impact from trade wars will materialize this year for American workers.
“Politicians can count their lucky stars that companies are holding on to their workers despite the storm clouds forming that could slow the economy further in the second half of the year,” said Christopher Rupkey, chief economist at fwdbonds, a financial markets research firm.
Transportation and warehousing companies added 29,000 jobs last month, suggesting companies have built up inventory before imported goods are hit with new tariffs. Healthcare companies added nearly 51,000 jobs and bars, restaurants almost 17,000 and construction firms 11,000. Factories lost 1,000 jobs.
Labor Department revisions shaved 58,000 jobs from February and March payrolls.
Average hourly earnings ticked up 0.2% from March and 3.8% from a year ago, nearing the 3.5% that economists view as consistent with the 2% inflation the Federal Reserve wants to see.
Trump’s massive taxes on imports to the U.S. are likely to raise costs for Americans and American businesses that depend on supplies from overseas. They also threaten to slow economic growth.
The drastic changes have shaken markets and consumers. The Conference Board, a business group, reported Tuesday that Americans’ confidence in the economy fell for the fifth straight month to the lowest level since the onset of the COVID-19 pandemic.
Bill Adams, chief economist at Comerica Bank, called the jobs report “reassuringly normal. The fears of a softer labor market due to tariff uncertainty went unrealized last month … There are signs that businesses are reining in plans for hiring and capital spending and that consumers are turning more cautious toward discretionary spending.’’
“For now, the unemployment rate and the number of people filing claims for jobless benefits every week remain low by historical standards,” Boston College economist Brian Bethune said this week.
After the jobs numbers were released, Trump repeated his call for the Federal Reserve to lower its benchmark short-term interest rate, which it raised to combat inflation. Trump said on social media platform Truth Social that there is “NO INFLATION” and “employment strong.”
Yet as long as the job market remains healthy, the Fed will likely stay on the sidelines as it takes time to evaluate the impact of tariffs. Fed chair Jerome Powell has underscored that the duties are likely to push up prices in the coming months, making the central bank wary of the potential for higher inflation.
The Fed typically fights inflation with higher interest rates, so it is unlikely to cut its key short-term rate anytime soon. It may change course if layoffs spike and unemployment rises.
Some U.S. companies stand to benefit from Trump’s protectionist policies.
Allen Jacoby, executive vice president of textile division at Milliken & Co., said that cheap Chinese imports have hurt business at the Spartanburg, South Carolina, manufacturer. His division makes Polartec fabric for brands such as North Face and Patagonia and has closed six plants and reduced its payrolls 12% since 2019.
Trump’s tariffs, he said, could improve Milliken’s sales and hiring. “It’s too early to tell, but there’s more optimism than pessimism,” he said.
Adapted from reporting by the Associated Press.
