What to know as economic uncertainty persists


Despite the jobs gains, the report showed signs of a slowing economy elsewhere. Average hourly earnings climbed just 0.17% for the month, below the 0.3% forecast by economists. The share of unemployed people out of work for at least 27 weeks also returned to its pandemic-era high of 23.5%. So did the median unemployment duration, which climbed to 10.4 weeks.

Markets ticked higher following the report, while traders trimmed bets that the Federal Reserve will lower interest rates in the short term. Some analysts said Friday’s data, which covers only the first two weeks of April, reflects conditions that are already dissipating.

“Today’s data feels somewhat backward looking and the risks remain that a weakening economy could see the Fed resume its easing cycle later in the year,” Lindsey Rosner, head of multisector investing at Goldman Sachs, said in a note to clients Friday.

Olu Sonola, head of U.S. economic research at Fitch Ratings, said in a note that “the outlook remains very uncertain” despite recent metrics pointing to a “fundamentally strong” economy through the first week of April. “The Fed will continue to sit on its hands until real weakness materializes in the labor market,” he said Friday.

Trump took to his Truth Social platform following the report to repeat his recent calls for another rate cut.

“Just like I said, and we’re only in a TRANSITION STAGE, just getting started!!! Consumers have been waiting for years to see pricing come down. NO INFLATION, THE FED SHOULD LOWER ITS RATE!!! DJT,” the president wrote, returning to a theme he has recently emphasized despite campaigning on “immediate” economic relief.

Some analysts expect to see further headwinds turn up in the weeks and months ahead. The impact of tariffs on slowing port shipments, for instance, has begun to appear only recently.

Over the past 12 months, moreover, just three hiring sectors have accounted for about 80% of all job growth in the economy, according to Vanguard financial group: government, health care and social assistance, and leisure and hospitality. The first two sectors now face pressure from DOGE cuts, while leisure and hospitality jobs are vulnerable to Trump’s immigration crackdown, Vanguard said. In general, however, April is typically a slower month for hiring, especially in services industries, EY analysts recently noted.

Stock markets have largely recovered from the initial tumult of Trump’s “Liberation Day” tariff rollout exactly one month ago. The S&P 500 has returned to its pre-April 2 level, although it remains 8% below the all-time high it notched Feb. 19, about a month into Trump’s second presidency.

While many companies have reined in financial expectations for the year, others — especially major tech firms — have so far sailed through relatively unscathed. Microsoft shares have climbed nearly 20% over the past month, though much of that gain came in recent days as investors cheered fresh signs of strong demand for artificial intelligence and cloud computing.

Meanwhile, employers continue to announce U.S. hiring or expansion plans, though in some cases it has not been clear whether the plans were already underway. On Thursday, The Wall Street Journal reported Kimberly-Clark planned to invest $2 billion and create 900 jobs as it ramped up its U.S. manufacturing. Hyundai, Johnson & Johnson, Nvidia and Toyota have made similar announcements — recently touted by Trump.

But the threat from tariffs continues to hang over the economy, which shrunk in the first quarter, and consumer sentiment remains at decade lows. The U.S. Chamber of Commerce has urged the Trump administration to spare smaller companies in particular from his trade war.

“We are deeply concerned that even if it only takes weeks or months to reach agreements, many small businesses will suffer irreparable harm,” the powerful business group said in a letter to senior White House officials Wednesday.



Source link

Show Comments (0) Hide Comments (0)
Leave a comment

Your email address will not be published. Required fields are marked *