Strong Jobs Report Eases Recession Fears
The U.S. economy added 177,000 jobs in April, exceeding Wall Street’s expectations of 135,000.
President Donald Trump hailed the report as a win, calling it the “second jobs beat in a row.”
Markets reacted positively to the news, with the S&P 500 rising 1.5% by Friday afternoon.
Economists said the strong job growth reflects economic resilience, not necessarily Trump’s policies.
Figure 1: The U.S. economy added 177,000 jobs in April
Key Sectors Show Limited Growth
Manufacturing, construction, mining, and oil and gas extraction saw little to no job gains in April.
These sectors form the core of Trump’s industrial revival agenda and remain largely unchanged.
Instead, health care added 51,000 jobs, while private education and health services added 70,000.
Federal job cuts continued, with 9,000 lost in April and 26,000 since January under the DOGE plan.
However, state and local governments hired enough workers to offset federal reductions, adding 10,000 jobs overall.
Job Market Remains Critical Indicator
Hiring slowed slightly from March’s revised 185,000 figure, but remained stronger than feared.
The unemployment rate held at 4.2%, despite over 500,000 people joining or rejoining the workforce.
April job gains came largely from hospitals, restaurants, and warehouses.
The health of the job market will remain central to the economic outlook.
If job growth weakens, consumer spending may fall and trigger recession.
Figure 2: The unemployment rate remains steady at 4.2%
Tariffs Cloud Economic Outlook
Trump’s tariff policies have not yet shown full impact on job markets, economists warned on Friday.
April saw 29,000 jobs added in transportation and warehousing, likely due to importers rushing orders.
Samuel Tombs of Pantheon Macroeconomics warned logistics and retail sectors may soon face layoffs.
Torsten Sløk of Apollo said a global shipping slowdown could cause major job losses in coming weeks.
Wages Rise, But Below Expectations
Average hourly earnings increased 0.2% in April, below Wall Street’s 0.3% forecast.
Yearly wage growth remained at 3.8%, matching March figures.
White House press secretary Karoline Leavitt said, “Wages are continuing to rise, and labour force participation is increasing.”
She added, “This is exactly what we want to see. More Americans working for higher wages. More winning is on the way!”
Trump Seeks Fed Rate Cuts as Markets Hold Firm
President Trump used Truth Social to call on the Federal Reserve to cut interest rates.
The Fed, however, appears set to hold rates steady during its next meeting.
The CME Group’s FedWatch tool showed expectations for a July rate cut but not before.
Wall Street traders reacted by selling bonds, pushing the two-year Treasury yield up by 13 basis points.
Jay Hatfield of Infrastructure Capital Management said, “The only thing that’s going to get them off the dime… is a weakening in the labor market.”
Industrial Decline Continues
Factories cut 1,000 jobs in April as tariffs strained supply chains and production costs.
A survey by the Institute for Supply Management showed falling factory orders and output.
Tim Fiore, who oversees the survey, said, “We’re on the edge of a cliff… the signs right now are not positive.”
Economic Growth Stalls as Trade War Bites
The U.S. economy shrank in the first quarter as businesses braced for tariff-related costs.
Trump’s new tariffs, announced in early April, raised average rates to Depression-era levels.
The International Monetary Fund forecast higher prices and slower economic growth due to the tariffs.
Consumer Confidence Declines
Consumers reacted with concern as tariffs and market volatility increased.
An index of consumer confidence dropped to its lowest level since the pandemic began.
Conclusion: Strong Jobs Report Buys Time but Risks Remain
April’s jobs report offered temporary relief for the administration as tariffs loom over key sectors.
The report suggests the economy is holding steady but offers limited support for Trump’s trade agenda.
Manufacturing and industrial sectors remain under pressure as broader economic risks persist.
