The US added more jobs than expected in April, while unemployment held steady
The US added 177,000 jobs in April, surpassing the forecast, and unemployment remained at 4.2%.
Economists expected a gain of 138,000 jobs and for unemployment to hold steady. Unemployment has been at least 4% since May 2024.
This follows real gross domestic product shrinking for the first time in three years, sparking fears of a recession. However, some economists think this could be avoided.
"We're on a path toward a recession, but it is clear what can get us off that path, and that would be less aggressive policies," Claudia Sahm, chief economist at New Century Advisors, told Business Insider.
There are other warning signs beyond the drop in real US GDP. KPMG chief economist Diane Swonk recently told BI that the "deterioration in job security we are seeing is particularly worrisome" and that the "drop in consumer attitudes is in recession territory."
President Donald Trump announced tariffs on April 2, including higher ones than the 10% base on individual countries. While tariffs could result in some job losses, Trump announced on April 9 a 90-day pause on many of the tariffs announced earlier that month.
"This data is too soon to show the full impacts of the tariffs," Daniel Zhao, lead economist at Glassdoor, told BI.
It could be a long time before those impacts appear. "Even in the optimistic scenario in which tariffs have the effect of bringing production of some goods back to America, those gains are likely years away," Kevin Rinz, senior fellow and research advisor at the Washington Center for Equitable Growth, said. "Businesses will face increased costs of imported inputs and decisions about how those costs will affect their operations much more quickly."
However, new tariffs aren't the only policy from the Trump administration that will likely affect the job market.
"Large cuts to the federal workforce and the cancellations of many government contracts will also be a drag on payroll growth in coming months while tighter immigration flows will weigh on labor supply dynamics, further constraining job growth," Lydia Boussour, senior economist at EY, said.
The next scheduled Federal Open Market Committee meeting, where members will decide what to do with interest rates, is less than a week away. CME FedWatch, which has the chances of rate moves based on market trades, shows a strong probability the Fed will hold rates steady again.
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