U.S. Employers Add A Surprising 177,000 Jobs As Unemployment Stays At 4.2% | EUROtoday

WASHINGTON (AP) —American employers added a better-than-expected 177,000 jobs in April because the job market confirmed resilience within the face of President Donald Trump’s commerce wars.

Hiring was down barely from a revised 185,000 in March and got here in above economists’ expectations for a modest 135,000. The unemployment fee remained at a low 4.2%, the Labor Department reported Friday.

President Donald Trump’s aggressive and unpredictable insurance policies – together with huge import taxes – have clouded the outlook for the economic system and the job market and raised fears that the American economic system is headed towards recession.

But Friday’s report confirmed the injury isn’t displaying up within the labor market but. “The labor market refuses to buckle in the face of trade war uncertainty,’’ Christopher Rupkey, chief economist at fwdbonds, a financial markets research firm. “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.’’

Transportation and warehousing companies added 29,000 jobs last month, suggesting that companies have been stocking up before essential, imported goods are hit with a wave of new tariffs, driving prices higher. 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.

The report showed that 518,000 people entered the labor force, and the percentage of those working or looking for work ticked up slightly.

“We are not seeing right now any really adverse effects on the employment market,’’ Boston College economist Brian Bethune said before the report came out.

Yet many economists fear that the U.S. job market will deteriorate if economic growth takes a hit from trade wars.

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 cancelling federal contracts, Elon Musk’s Department of Government Efficiency risks wiping out jobs inside the government and out.

“Looking ahead, we expect the steep tariff increases and the surge in uncertainty and financial market volatility will result in a more pronounced labor market downshift than previously anticipated,” Lydia Boussour, senior economist on the accounting and consulting large EY, wrote this week. “Large cuts to the federal workforce and the cancellations of many authorities contracts can even be a drag on payroll development in coming months.’’

A slowdown in immigration “will weigh on labor provide dynamics, additional constraining job development. We foresee the unemployment fee rising towards 5% in 2025.’’

Trump’s insurance policies have shaken monetary markets and frightened shoppers. The Conference Board, a enterprise group, reported Tuesday that Americans’ confidence within the economic system fell for the fifth straight month to the bottom degree because the onset of the COVID-19 pandemic.

American staff have at the least one factor going for them. Despite the uncertainty about fallout from Trump’s insurance policies, many employers don’t wish to threat letting workers go – not after seeing how onerous it was to carry individuals again from the large however short-lived layoffs of the 2020 COVID-19 recession.

“They laid thousands and thousands of those individuals off, and so they had a hell of a time getting them again to work,’’ Boston College’s Bethune mentioned. “So for now, the unemployment fee and the variety of individuals submitting claims for jobless advantages each week stay low by historic requirements.

The federal authorities’s workforce fell by 9,000 on prime of 17,000 job losses in February and March, Still, the total impact of Musk’s DOGE cuts is probably not displaying up but. For one factor, Bethune famous, job cuts orders by the billionaire’s DOGE are nonetheless being challenged in court docket. For one other, a few of these leaving federal businesses have been pressured into early retirement and don’t present up within the Labor Department’s depend of the unemployed.

Solid hiring and low unemployment will probably hold the Federal Reserve on the sidelines because it takes time to guage the affect of tariffs on the economic system. Fed chair Jerome Powell has underscored that the duties are more likely to push up costs within the coming months, making the central financial institution cautious of the potential for greater inflation.

The Fed usually fights inflation with greater rates of interest, so it’s unlikely to chop its key short-term fee anytime quickly. It would possibly change course and scale back charges if layoffs spiked and unemployment rose, however Friday’s report means that isn’t taking place but.

AP Economics Writer Christopher Rugaber contributed to this story.