The already fragile U.S. economy will come under further focus Friday morning with the release of the April jobs report. It will offer a snapshot of economic momentum as signs of strain grow across both public and private sectors — and it’ll provide a look into how the economy and labor market are being affected by President Donald Trump’s tariffs.
The report is expected to show steady, if unimpressive, growth. Economists surveyed by Bloomberg estimate that Friday’s numbers will show that employers added 130,000 jobs last month, below the unexpectedly high 228,000 jobs added in March. The estimated April figure would be an improvement over the 114,000 average seen in January and February, but it remains below any kind of pace that would be needed to dispel growing recession fears.
If April’s numbers fall below six-figure growth, it would be a worrying sign, indicating that Trump’s tariffs are eroding the country’s economy and that businesses are postponing investments and hiring as a result. But for the most part, economists believe the surest signs of a tariff-related downturn will arrive in the second half of the year, as price hikes linked to the sweeping levies filter down.
The unemployment rate is expected to remain steady at 4.2%, consistent with the last few months and within the narrow range it has maintained since May 2024. However, some are bracing for an uptick in layoffs as recession fears loom large.
For the most part, forecasters don’t think that federal layoffs and buyouts as a result job-slashing measures from the Elon Musk-led Department of Government Efficiency (DOGE) will show up yet in the jobs data.
Still, certain industries are already showing cracks — manufacturing, construction, retail, transportation/warehousing/supply chain, and financial services have all seen a pullback in job openings, while tech, legal, and health care sectors will likely show a hiring slowdown. Leisure and hospitality — once a post-lockdowns bright spot — has also begun to taper off.
The Federal Reserve will be watching the report closely for guidance on inflation — a significant downturn could jolt them out of wait-and-see mode and cause them to cut interest rates that have remained high since the post-lockdowns inflation surge. Meanwhile, a surprisingly strong jobs report could reinforce the case for patience.
The labor data arrives just days after the Commerce Department reported a surprising 0.3% contraction in GDP for the first quarter — the first economic shrinkage since 2022. That decline was partially driven by a surge in imports ahead of Trump’s tariffs, which widened the trade deficit and weighed heavily on net exports.
Hiring in the private sector, already showing signs of fatigue earlier this year, has continued to lose steam. An ADP report showed that private-sector payrolls grew by just 62,000 in April, the smallest gain since July 2024. “Unease is the word of the day,” ADP’s (ADP+0.39%) chief economist, Nela Richardson, said in a statement accompanying the report.
Still, the jobs report will have the most significant data related to a potential recession. So all eyes will turn to Friday morning’s numbers, to see if the report serves as a modest reassurance that the labor market retains resilient (at least for now) — or a warning sign of bigger trouble ahead.
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