Job gains continued at a steady pace in April, but the ripple effects of President Donald Trump’s disruptive economic policies are starting to show.
U.S. employers added 177,000 jobs last month, according to Bureau of Labor Statistics figures published Friday. The unemployment rate remained unchanged at 4.2%.
The numbers were better than expected by a panel of economists surveyed by Bloomberg, who gave a median estimate of 133,000. Because jobs numbers for February and the bumper month of March were revised down, the April figures were in line with the pattern of previous months.
The headline numbers appeared to show a strong job market, but signs of trouble ahead are seeping through. While total government employment rose, federal government jobs continued to fall and jobs in motor vehicles and parts manufacturing saw a slide. Even sectors experiencing growth could be short-lived, because they are temporary or because disruptions lie ahead. With consumer sentiment at historic lows and businesses facing economic uncertainty, hiring is expected to halt or fall in coming months.
“The elephant in the room is that we are not seeing the full impact of tariffs,” said Daniel Zhao, lead economist at Glassdoor. “This is still a look in the rearview mirror,” he pointed out, referring to the time-lag between the survey taking place in the week of April 12 and its publication on Friday.
The survey period includes Trump’s April 2 announcement of a universal tariff of 10% on all trading partners that sent markets reeling. Although the new 10% rate was implemented, additional “retaliatory” levies announced the same day have been paused for most countries as they scramble to negotiate. Chinese imports, however, now face levies of 145%. The stock market had one of the worst starts under a new administration, and contrary to expectations, bonds are also declining and the dollar is weak.
“The number was a little bit better than expected, if you dig beneath the surface there definitely were some elements of weakness,” said Nancy Vanden Houten, senior economist at Oxford Economics.
In some sectors the impact of the Trump administration’s policies are starting to appear.
DOGE’s federal worker layoffs led to a 9,000 decline in federal government employment in April, bringing the total drop since January to 26,000. Those on administrative leave are not yet counted as unemployed, suggesting these numbers will continue to come through for the rest of the year.
Instead of benefitting from tariffs, manufacturing is showing early signs of suffering. Jobs in motor vehicles and parts fell by 4,700.
“That says to me that we are starting to see the beginning of those tariff effects,” said Liz Pancotti, managing director of policy and advocacy at Groundwork Collaborative.
Contrary to the administration’s claims that tariffs will bring back domestic manufacturing jobs, the industry is expected to be one of the hardest hit by tariffs due to its reliance on global supply chains leading to an increase in production costs.
Even sectors that showed job growth this month may not be so certain long-term.
Healthcare has been a major source of stable job gains for the U.S. economy, adding 51,000 jobs this month, a similar pace to the last 12 months. But that could change as the Medicaid budget could be slashed by $880 billion among other cuts debated for the sector.
“Right now we see job growth really being driven by sectors that could be decimated by federal spending cuts,” Pancotti warned.
Another sector that saw growth was transportation and warehousing, with 29,000 jobs added in April. Record levels of imports in goods that reached $346.8 billion in March increased demand for ports, haulage firms and trucking companies to store and transport the extra supplies. But with less international shipments headed to the U.S. already, that is also likely to fizzle out.
At Texas Cartage Warehouse, the beginning of the year is usually fairly slow. But this year they saw a 30% increase in business in the first three months compared to last year.
“We’ve had a really busy first quarter,” said Jesse Medina, director of operations. In their two warehouses in Dallas, customers from manufacturing to retail have been seeking storage space for their imported supplies ahead of looming tariffs.
“Customers are piling up inventory as much as they can,” Medina said. But with that growth being “so high” and tied to the tariff situation, he is not expecting the boom in business to continue through the rest of the year.
Economists are concerned that uncertainty is paralyzing businesses from making investment decisions and creating jobs. In earnings calls across sectors, company heads are hesitating.
Consumer sentiment has fallen to one of the lowest on record while expectations of long-term inflation hit a peak last seen in 1991. Households are worried about price rises from tariffs and job losses, and their wealth is declining from the fall in bond markets.
“When you see such big falls in consumer confidence, you tend to worry about discretionary spending,” said James Knightley, chief international economist at ING. That could lead to weaker jobs in the coming months.
Some small businesses are already dealing with those effects.
At Momentum Coffee in Chicago, fewer people are buying coffee. Owner and co-founder Nikki Bravo says the weather and the news change people’s buying habits.
“They might come fewer times, they may start making their coffee at home. Even if they’re sacrificing quality, they might buy it from someplace that’s a little cheaper,” she said. She noticed customers paying more attention to rewards programs that save them one or two dollars.
Bravo would usually hire extra staff now for the summer season, but this year to save on expenses she is planning to hire “just in time.” She is having to focus more on experience than the opportunity to train a young person when it comes to new staff.
“I need the person that’s going to require the least amount of training to get up to speed the quickest, because it really becomes important with regard to the dollars,” she said.
