American employers added a better-than-expected 177,000 jobs in April as the job market showed resilience in the face of President Donald Trump's trade wars.
Hiring was down slightly from a revised 185,000 in March and came in above economists’ expectations for a modest 135,000. The unemployment rate remained at 4.2%.
President Donald Trump’s aggressive and unpredictable policies – including massive import taxes – have clouded the outlook for the economy and the job market and raised fears that the American economy is headed toward recession.
“We are not seeing right now any really adverse effects on the employment market,’’ said Boston College economist Brian Bethune, who expects a “reasonably good’’ 150,000 new jobs in April.
“For the second month in a row, the jobs report beat economists’ expectations,” said Abigail Jackson, deputy communications director for the Republican National Committee. “President Trump’s agenda is supercharging the American economy and creating more good-paying jobs for American workers.”
Jackson noted that of the 177,000 jobs created in April, more than 70,000 were in private education and health services, 29,000 in transportation and warehousing, 24,000 in leisure and hospitality, and 14,000 in finance.
Jackson noted that the jobs were created “all while the federal government cut jobs for the third straight month.”
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But many economists worry the job market is likely to deteriorate.
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 at the accounting and consulting giant EY, wrote this week. “Large cuts to the federal workforce and the cancellations of many government contracts will also be a drag on payroll growth in coming months.’’
A slowdown in immigration “will weigh on labor supply dynamics, further constraining job growth. We foresee the unemployment rate rising toward 5% in 2025.’’
And Boussour is far less optimistic about April job growth than most other economists: She forecasts that employers added just 65,000 new jobs last month.
There have been recent harbingers of a potential jolt to the strong U.S. jobs landscape, a bright spot even during the recovery from a global pandemic.
Payroll provider ADP reported Wednesday that companies added just 62,000 jobs in April, about half of what was expected and down from 147,000 in March. “Unease is the word of the day,” said Nela Richardson, chief economist at ADP. “It can be difficult to make hiring decisions in such an environment.”
The ADP number often diverges from the government's monthly jobs data, but on Thursday the U.S. Labor Department reported that the number of Americans applying for unemployment benefits rose last week to the highest level since February. The 241,000 weekly claims reported Thursday are still historically low, but thousands more Americans sought help last week than economists had expected.
Trump’s policies have shaken financial markets and frightened 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.
In the face of high interest rates engineered by the Federal Reserve in 2022 and 2023 to fight inflation, hiring has clearly slowed — to a solid but unspectacular average of 152,000 jobs a month this year. But it's down from 168,000 in 2024, 216,000 in 2023, 380,000 in 2022 and a record 603,000 in 2021 as the economy surged back from pandemic lockdowns.
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American workers have at least one thing going for them. Despite the uncertainty about fallout from Trump’s policies, many employers don’t want to risk letting employees go – not after seeing how hard it was to bring people back from the massive but short-lived layoffs of the 2020 COVID-19 recession.
“They laid millions of these people off, and they had a hell of a time getting them back to work,’’ Boston College’s Bethune said. "So for now, the unemployment rate and the number of people filing claims for jobless benefits every week remain low by historical standards.
Bethune does not expect Musk’s cuts to the federal workforce to show up much in the April jobs numbers. For one thing, job cuts orders by the billionaire’s DOGE are still being challenged in court. For another, some of those leaving federal agencies were forced into early retirement – and don’t show up in the Labor Department’s count of the unemployed.
Samuel Tombs and Oliver Allen of Pantheon Macroeconomics see employers adding 150,000 jobs in April. But they expect job creation to slow to around 100,000 a month in May and June as falling business confidence takes a toll on hiring. A slumping labor market, they reckon, will convince the Fed to cut interest rates in June or July.
After cutting rates three times last year – as inflation eased closer to its 2% target – the Fed has been reluctant to cut any further until it has a better idea whether Trump’s tariffs will push prices higher. A deterioration in the job market could persuade Fed officials to offer the economy some relief.
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