LDN - Business

Employers added a surprising 177,000 jobs as job market shows resilience. Unemployment stays at 4.2%

[May 03, 2025] By PAUL WISEMAN

WASHINGTON (AP) — American employers added a surprising 177,000 jobs in April as the job market showed resilience in the face of President Donald Trump's trade wars.

Hiring fell slightly from a revised 185,000 in March, but that is above economist projections of 135,000 jobs. The unemployment rate remained at a low 4.2%, the Labor Department reported Friday.

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.

Friday's report showed employment, one of the strongest aspects of the U.S. economy, remains solid, yet many economists anticipate that a negative impact from trade wars will materialize this year for American workers and potentially, President Trump.

“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," said Christopher Rupkey, chief economist at fwdbonds, a financial markets research firm.

Transportation and warehousing companies added 29,000 jobs last month, suggesting companies have built up inventory before imported goods are hit with new tariffs. 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.

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.

The drastic changes have shaken markets and 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.

Still, Bill Adams, chief economist at Comerica Bank, called the jobs report “reassuringly normal. The fears of a softer labor market due to tariff uncertainty went unrealized last month ... There are signs that businesses are reining in plans for hiring and capital spending and that consumers are turning more cautious toward discretionary spending.’’

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 struggling to bring people back from the massive but short-lived layoffs from the pandemic.

“For now, the unemployment rate and the number of people filing claims for jobless benefits every week remain low by historical standards,” Boston College economist Brian Bethune said this week.

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A waiter carries drinks, Friday, April 18, 2025, in Miami Beach, Fla. (AP Photo/Marta Lavandier, File)

The federal government’s workforce fell by 9,000 on top of 17,000 job losses in February and March, The full effect of Musk's DOGE cuts may yet to be seen. Bethune noted job cuts by the billionaire’s DOGE are still being challenged in court. Also, some of those leaving federal agencies were forced into early retirement and don’t count as unemployed.

After the jobs numbers were released, Trump repeated his call for the Federal Reserve to lower its benchmark short-term interest rate, which it raised to combat inflation. Trump said on social media platform Truth Social that there is “NO INFLATION” and “employment strong.”

Yet as long as the job market remains healthy, the Fed will likely stay on the sidelines as it takes time to evaluate the impact of tariffs. Fed chair Jerome Powell has underscored that the duties are likely to push up prices in the coming months, making the central bank wary of the potential for higher inflation.

The Fed typically fights inflation with higher interest rates, so it is unlikely to cut its key short-term rate anytime soon. It may change course if layoffs spike and unemployment rises.

Some U.S. companies stand to benefit from Trump’s protectionist policies.

Allen Jacoby, executive vice president of textile division at Milliken & Co., said that cheap Chinese imports have hurt business at the Spartanburg, South Carolina, manufacturer. His division makes Polartec fabric for brands such as North Face and Patagonia and has closed six plants and reduced its payrolls 12% since 2019.

Trump’s tariffs, he said, could improve Milliken’s sales and hiring. “It’s too early to tell, but there’s more optimism than pessimism,” he said.

Most Americans still enjoy job security, yet many who have lost jobs say that it's now harder to find work.

Jason Schunkewitz, 33, was laid off by a startup that uses virtual reality to train caregivers. Single and debt free, the Denver resident took some time off before beginning the job search in earnest.

He has a background in jobs training and economic development – a field heavily reliant on government grants. Trump spending cuts have eliminated some grants and generated uncertainty about others. Schunkewitz now says many nonprofits have postponed hiring.

“It’s just been silent in some cases,’’ he said. “It’s very tricky to navigate.’’ He's now focusing his job search on private companies, which might be more secure.

Schunkewitz is also developing a business making charcuterie-to-go packs – cured salami, aged cheese, dried fruit – for skiers, hikers and other adventurers. The business is in the early stages, but he said: “I hope it becomes a full-time job.’’

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