Robust US job market holds steady amidst customs dispute, assuring that prosperous times persist.
Robust Labor Market Continues Amid Trade Tensions
Contrary to President Trump's tariff announcements, the U.S. job market remains surprisingly resilient. Recent data shows that 177,000 jobs were added outside agriculture in April, exceeding economists' expectations, who had projected a mere 130,000 after a downward revision from the initially reported 228,000 in March. The unemployment rate held steady at 4.2 percent.
Economist Bastian Hepperle of Hauck Aufhäuser Lampe Privatbank positively comments, "The U.S. labor market is still running smoothly. The golden days aren't over yet." However, the prospect of an imminent interest rate cut, as Trump urges for, appears waning; the chance of a loosening for the next meeting in June drops to 50:50 on the futures markets. The remarkably stable job report arrives after the most recent gloomy economic data: GDP contracted in the first months of Trump's term.
Thomas Gitzel, chief economist of Liechtenstein VP Bank, underlines that the U.S. labor market report is only a snapshot, and the already imposed tariffs will weigh on private consumption and the willingness to hire in the service sector. At the same time, investment readiness in manufacturing is decreasing, as shown by surveys of regional Fed branches. This, in turn, will also impact the U.S. labor market. A slowdown in the labor market can be expected in the coming months.
From Dirk Schumacher, KfW chief economist's perspective, the Fed will likely consider lowering interest rates further as the economy weakens, foreseeing another rate cut in June.
STILL NO EVIDENCE OF JOB MARKET COLLAPSE
Trump imposed tariffs of 20 percent on multiple trading partners last month, later extended for 90 days, barring China, where tariffs were even increased to 145 percent, resulting in reciprocal tariffs of 125 percent on U.S. goods from China. Despite a pending trade conflict, China has shown openness to discussions about the matter after the U.S. approached them on the issue.
Christoph Balz, Commerzbank economist, explains that the April jobs report only covers part of the period after the imposition of massive tariffs on April 2. As such, the report offers only a fragmented reflection of the tariffs' effects. For now, there's no sign of a collapse in the job market.
MORE ARTICLES THAT YOU MIGHT LIKE:
- US Economy Shrinks – "False Start for Trump's Golden Age"
- Consumers Expect Inflation to Rise in Eurozone
- Still Room for Gradual Rate Cuts
- Trade Hopes Boost DAX – All-Time High Within Reach
- ING Bank Reports Lower Profit to Start the Year
- The U.S. job market, despite President Trump's tariff announcements and increasing tariffs with trading partners, showed no signs of collapse, with the unemployment rate holding steady at 4.2 percent in April.
- The robust job market in 2024 might be affected by the tariffs imposed by Trump, according to Thomas Gitzel, chief economist of Liechtenstein VP Bank, as they could weigh on private consumption and the willingness to hire in the service sector.
- The April jobs report shows a robust job market, but Christoph Balz, Commerzbank economist, notes that the report only covers a part of the period after the imposition of massive tariffs, offering a fragmented reflection of the tariffs' effects.
- The unemployment rate remaining steady, along with a potential interest rate cut by the Fed, indicates a need for continued financial investment in businesses to maintain this robust labor market in the face of trade tensions.
