The buoyant American labor market minimally stopped employment creation in April. The report published Friday by the Office of Labor Statistics just one month after it shows that the world’s first economy generated 177,000 jobs in April, the uncertainty caused by the president’s erratic economic and commercial policy has not managed to overcome the resistance of the labor market.
Economists expected the creation of some 135,000 jobs and that the unemployment rate was maintained at 4.2%. Although the unemployment rate has met expectations, job creation has been greater than expected. The Labor Statistics Office has reviewed the employment creation of March, which initially encrypted in 228,000 positions and now leaves in 185,000, so that in April the rhythm was practically maintained. On the other hand, the February figure has been reviewed down, from 117,000 to 102,000 jobs.
The new labor market data arrive in the same week when the Office of Economic Analysis has published its estimate that as a consequence of Trump’s measures.
In the month of April, the cutting of federal employees was noticed as a result of the 9,000 workers less in the month and the cut measured since January is 26,000. In addition, uncertainty was extended by the economy as a whole with the announcement of wild tariff
Numerous companies have reduced or retired their forecasts as a result of the impact of the commercial war. The advancement of some purchases has also been appreciated to try to dodge the increases in prices rigged to tariffs. Surveys show a collapse of consumer confidence and an unprecedented increase in inflation expectations.
The cooling of the labor market does not seem for now serious enough to force the Federal Reserve to resume the reduction of interest rates next week. Trump has attacked the independence of the Central Bank, claiming a cut in the price of money. After threatening to dismiss it, the president seems to want the measures with which he has weighed the US economy.
Powell, however, has pointed out that on the impact of economic policy changes before taking a step with interest rates. The rise in tariffs has complicated the Central Bank the achievement of its two objectives: price stability and the creation of the maximum possible employment.
Investors take for granted that the types will remain in the range of 4.25% -4.50% at the meeting of May 7. However, they are mostly inclined to a cut of 0.25 points for June 18. Powell could leave the door open for it at the press conference after the meeting next week, but given the changing situation, it is likely to refer to the evolution of the next data.
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