The United States added 177,000 jobs in April, exceeding forecasts, and unemployment remained at 4.2%.
Economists expected a gain of 138,000 jobs and unemployment to remain stable. Unemployment has been at least 4% since May 2024.
This follows a real gross domestic product narrowed for the first time in three years, arousing fears of a recession. However, some economists think it could be avoided.
“We are on the path of a recession, but it is clear what can move us away from this path, and it would be less aggressive policies,” Claudia Sahm, chief economist at New Century Advisors told Business.
Participation in the active population increased from 62.5% in March to 62.6%. The employment-population report increased from 59.9% to 60%.
March’s employment growth has been revised from 228,000 to 185,000 and the February gain was revised from 117,000 to 102,000. This means 58,000 less jobs.
The stock -up contracts jumped after the strong report.
There are other warning signs beyond the drop in real American GDP. The chief economist of KPMG, Diane Swonk, recently told Bi that the “deterioration of employment security that we see was particularly worrying” and that the “decrease in consumer attitudes is in territory of recession”.
President Donald Trump announced the prices on April 2, including higher than the base of 10% on individual countries. While the prices could cause job losses, Trump announced on April 9 a 90-day break on many prices announced earlier this month.
“These data are too early to show the full impacts of the prices,” said Daniel Zhao, principal economist in Glassdoor, in BI.
It could be long before these impacts appear. “Even in the optimistic scenario in which prices have the effect of bringing the production of certain products to America, these gains are probably in the years,” said Kevin Rinz, main member and research advisor at the Washington Center for Equitable Growth. “Companies will face an increase in the costs of imported inputs and decisions about how these costs will affect their operations much faster.”
However, new prices are not the only policy of the Trump administration which will probably affect the labor market.
“Large reductions in federal workforce and the cancellations of many government contracts will also be a brake on payroll growth in the coming months while stricter immigration flows will weigh on the dynamics of labor supply, said limited employment growth,” said Lydia Boussour, main economist at Ey.
Federal employment fell 9,000 in April. The Bureau of Labor Statistics said that workers on paid leave or obtaining departure are considered employees.
The next planned meeting of the Federal Open Market Committee, where members will decide what to do with interest rates, is less than a week old. CME Fedwatch, who has the chances of rate movement according to market transactions, shows a high probability that the Fed will again hold stable rates.
It is a story in development. Please check the updates.
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