U.S. Adds 177,000 Jobs in April, Exceeding Expectations Despite Policy Uncertainty

In April, U.S. employers added 177,000 new jobs, maintaining a steady pace of hiring despite fluctuations in policy statements and market volatility. The U.S. Department of Labor reported that the number of new jobs added in April exceeded economists' expectations of 133,000. However, the figure was lower than the 185,000 jobs added in March. The total number of jobs added in February and March was revised downward by 58,000.

Federal government layoffs also impacted employment numbers. In April, federal government employment decreased by 9,000. The new jobs added in April were roughly in line with the average monthly increase of 152,000 jobs over the past 12 months. Industries such as healthcare, transportation and warehousing, financial activities, and social assistance saw job growth.

President Trump's tariffs on key industries from steel to automobiles have caused uncertainty among businesses, prompting them to reassess their overall business strategies. Although Trump has paused several tariff measures, economists warn that the White House's plans will put pressure on many businesses, forcing them to cut costs and potentially lay off workers later this year.

Layoffs have not been widespread, and even companies that have not laid off workers may have paused hiring. James Knightley, an economist at ING Financial Markets, noted, "There is a long lead time between making hiring or layoff decisions and seeing the actual results. But as we move into the second half of the year, we will have to face the possibility of significant weakening in employment data, and the threat of a sharp slowdown in hiring will also exist."

The federal government layoffs initiated by the Trump administration have curbed employment growth in the government sector. However, some economists believe that the impact of the newly established government efficiency department and its reduction of thousands of federal jobs will not be fully reflected in the monthly employment data until the fall. Lawsuits and court orders have delayed the layoff process, and employees on unpaid leave or still receiving severance pay are typically still counted as employed.

April was a particularly volatile month, with Trump implementing large-scale tariff measures at the beginning of the month, only to pause many of them later. He had hinted at firing the Federal Reserve chairman but later stated that he had "no intention" of doing so. He is also reportedly considering significantly reducing tariffs on China and lowering taxes on the automotive industry.

Despite positive hard data on the economy, businesses and individuals surveyed expressed concerns. According to a survey by the University of Michigan, consumer confidence in April fell to one of the lowest levels on record. More Americans indicated that they expected their income growth to slow over the next year.

Another factor that could slow the job market in the coming months is Trump's border policies, which have led to a significant reduction in immigration. A decrease in foreign-born workers means a tighter labor market, particularly in construction, agriculture, hospitality, and healthcare. This could result in a paradoxical situation where hiring slows down, but the unemployment rate may decrease.

Currently, the uncertainty surrounding Trump's policies makes it difficult for businesses to predict market demand and plan ahead. This week, General Motors suspended its previously announced earnings forecast, citing the lack of clarity in Trump's tariff policies. JetBlue Airways stated that due to the uncertain macroeconomic environment, the company would not reaffirm its previously announced full-year performance forecast.