The latest US jobs report shows hiring there beat expectations once again in April. The economy added 177,000 jobs last month, well ahead of the 135,000 that economists were expecting.
Like most American economic indicators these days, the jobs data, inevitably, also has a political angle. April’s report in particular, as it’s the first to capture what impact, if any, there may be on the employment market from US president Donald Trump’s on-again-off-again tariffs as well as the ongoing hit from the deep cuts his administration has imposed on the federal government.
The top-line figure was a strong one, and markets reacted accordingly. Indeed the benchmark S&P 500 index surged to the point that it is now ahead of where it was before Trump’s tariff announcement sent markets swooning.
100 days of Trump: “It’s like The Karate Kid, tax on, tax off, tariffs on, tariffs off”
The portion of the population that is either working or actively looking for work increased while the pace of wage growth slowed – that’s positive for economists worrying about inflation.
Look deeper, though, and there are some cracks, albeit small ones, starting to appear in the data.
February and March’s jobs numbers were revised lower, knocking about 58,000 roles off the US economy. Revisions aren’t unusual in economic data, but they do warrant attention especially when the headline figure is so strong.
The manufacturing sector so beloved by the president lost about 1,000 jobs and the number of federal government roles dropped by 9,000 in April alone. Federal government jobs are now down about 26,000 since January, when Trump appointed Elon Musk to lead his so-called Department of Government Efficiency.
Still, it seems inevitable that Trump will look to claim credit for the jobs report. As tends to be the case with the president, when the data is good it’s because of him. When the data is bad – as US GDP data was this week – it’s because of somebody else (he blamed former president Joe Biden).
It wouldn’t be surprising if Trump were to use the report as a stick to beat Federal Reserve chairman Jerome Powell to cut interest rates. There are few inflationary signs in the report after all.
Powell, though, will know that the impact of tariffs is only starting to feed into the US economy. There is much more data to come.
