WASHINGTON, D.C. — American employers added a surprising 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 last Friday.
Trump’s aggressive and unpredictable policies — including massive import taxes — have clouded the outlook for the economy and the job market, raising fears that the American economy is headed toward recession.
Last 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 and, potentially, Trump.
“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. Health care companies added nearly 51,000 jobs, bars and restaurants almost 17,000, while construction firms added 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. His immigration crackdown threatens to make it more difficult for hotels, restaurants and construction firms to fill job openings. By purging federal workers and canceling federal contracts, Elon Musk’s Department of Government Efficiency risks wiping out jobs inside the government and out.
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.
Still, 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.’’
American workers have at least one thing going for them. Despite the uncertainty about the fallout from Trump’s policies, many employers don’t want to risk letting employees go — not after struggling to bring people back from the massive-but-short-lived layoffs from the pandemic.
“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.
The federal government’s workforce fell by 9,000 on top of 17,000 job losses in February and March, though the full effect of Musk’s DOGE cuts may yet be seen. Bethune noted job cuts by the billionaire’s DOGE are still being challenged in court. Also, some of those leaving federal agencies were forced into early retirement and don’t count as unemployed.
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.
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 rise.
Some U.S. companies stand to benefit from Trump’s protectionist policies.
Allen Jacoby, executive vice president of the textile division at Milliken & Co., said that cheap Chinese imports have hurt business at the Spartanburg, South Carolina, manufacturer. His division, which makes Polartec fabric for brands such as North Face and Patagonia, has closed six plants and reduced its payrolls by 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.
