In a surprising development for the U.S. job market, American employers onboarded an impressive 177,000 new employees in April, showcasing the economy’s durability even as President Donald Trump’s trade strategies create economic uncertainty. Although there was a slight decrease in hiring compared to a revised count of 185,000 jobs in March, this figure significantly outperformed economists’ forecast of 135,000 jobs. Meanwhile, the unemployment rate held steady at a historically low 4.2%, according to the Labor Department’s latest Friday report.
Despite the aggressive and often unpredictable nature of Trump’s economic policies, including the implementation of hefty import tariffs, the job market has shown remarkable strength. However, many economic experts predict that the repercussions of trade conflicts may negatively impact American workers and President Trump in the coming months.
Christopher Rupkey, chief economist at the financial research firm fwdbonds, commented on the situation by saying, “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.”
Notably, the transportation and warehousing sectors observed the addition of 29,000 jobs, indicating that companies may be stockpiling goods in anticipation of upcoming tariffs. Moreover, the healthcare industry witnessed an increase of nearly 51,000 jobs, while restaurants, bars, and construction companies added 17,000 and 11,000 jobs, respectively. However, the manufacturing sector experienced a loss of 1,000 jobs.
Revisions by the Labor Department resulted in a deduction of 58,000 jobs from payroll figures for February and March. Meanwhile, average hourly earnings inched up by 0.2% from March, amounting to a 3.8% increase from the previous year. This figure is nearing the 3.5% mark considered by economists to align with the Federal Reserve’s desired 2% inflation rate.
The tariffs and trade policies introduced by Trump are likely to increase expenses for both American consumers and businesses reliant on foreign supplies, potentially dampening economic growth. Additionally, the president’s stringent immigration policies are making it difficult for industries like hospitality and construction to fill available positions. In a separate development, Elon Musk’s Department of Government Efficiency has begun cutting federal jobs and contracts, further affecting job numbers.
These drastic policy shifts have generated turbulence in markets and among consumers, as evidenced by a recent report from The Conference Board showing a decline in American economic optimism for five consecutive months. However, Bill Adams, the chief economist at Comerica Bank, referred to the employment report as “reassuringly normal,” noting that concerns regarding a weakened labor market due to tariff-related uncertainty were unfounded for the time being.
The forecast remains positive for U.S. workers given the cautious approach many employers have taken to retain staff, especially following the significant yet short-lived pandemic-induced layoffs. As of now, both the jobless claim rates and unemployment figures continue to remain low by historical standards, pointed out Boston College economist Brian Bethune.
Despite the federal workforce seeing a reduction of 9,000 jobs on top of previously reported February and March losses, the full impact of Elon Musk’s Department of Government Efficiency restructuring might not yet be fully apparent. Some workforce reductions are still being contested in court. In certain instances, departures from federal agencies involve early retirements, which consequently are not reflected as increases in the unemployment rate.
In line with the release of these figures, Trump urged the Federal Reserve to decrease its standard short-term interest rate, which had been raised as a countermeasure against inflation. He expressed on Truth Social that there is “NO INFLATION” and that “employment [is] strong.”
However, as the job market demonstrates ongoing robustness, the Federal Reserve may take a wait-and-see approach to assess the implications of trade tariffs on inflation and economic growth. Jerome Powell, Fed chair, has emphasized that tariffs might elevate prices in the forthcoming months, adding caution to the central bank’s inflationary concerns.
This may result in the Federal Reserve maintaining current interest rates until there is a potential shift indicated by increased unemployment or layoffs. Nonetheless, Trump’s protectionist strategies may prove beneficial for certain American companies.
Among those seeing potential advantage is Milliken & Co., a textile manufacturer in Spartanburg, South Carolina. Executive Vice President Allen Jacoby stated the influx of low-cost Chinese imports had adversely affected their business. His division produces Polartec fabric for renowned brands, including North Face and Patagonia, and has shut six plants while reducing workforce by 12% since 2019. Jacoby indicated that Trump’s tariff introduction might enhance sales and employment for Milliken, remarking, “It’s too early to tell, but there’s more optimism than pessimism.”
Most Americans continue to enjoy job security, though some who have lost positions find themselves in a challenging job market. Jason Schunkewitz, 33, recently laid off from a startup specializing in virtual reality training for caregivers, is among those facing difficulties. Having significant experience in job training and economic development—areas often reliant on government funding—he notes that spending cuts under Trump have eliminated certain grants and stalled others, leading nonprofit organizations to delay hiring.
“It’s just been silent in some cases,” Schunkewitz remarked, highlighting the complexities involved in navigating this job landscape. He is now concentrating his job search within the private sector, considering it more stable.
Schunkewitz is also nurturing a new entrepreneurial venture, crafting charcuterie-to-go packs—consisting of cured salami, aged cheese, and dried fruit—for outdoor enthusiasts like skiers and hikers. This project is still in its infancy, though he expressed, “I hope it becomes a full-time job.”