Core Data

  • In the week ending April 19, initial U.S. jobless claims rose by 6,000 from the previous week to a total of 222,000, indicating that the global tariffs announced by President Trump earlier this month have not caused an immediate shock to employment or the overall labor market.
  • Data released by the U.S. Labor Department on Thursday showed that initial jobless claims have fluctuated within a narrow range over the past two months.
  • In the week ending April 12, continuing claims—the total number of people receiving unemployment benefits—fell to 1.84 million, a decrease of 37,000 from the previous week.

In-Depth Analysis

Economists believe that disruptions from Trump's import tariffs—including a 10% baseline tariff on nearly all U.S. trading partners and an additional 145% tariff on goods imported from China—could disturb the job market in the coming weeks.

Last month, nonfarm payrolls increased by 228,000, and the unemployment rate held at 4.2%. Gregory Daco, chief economist at EY, said in a statement on Wednesday that these figures highlight the strength of the U.S. economy before Trump announced sweeping tariffs on what he called "Liberation Day" on April 2.

"However, downside risks to the labor market have escalated significantly in recent weeks," Daco said.

Daco expects the unemployment rate could "rise to around 5%" as economic activity slows and business leaders seek to control labor costs amid high input costs. He also forecasts that average monthly job growth this year will slow to 50,000, down from 160,000 in 2024.

Douglas Holtz-Eakin, president of the American Action Forum, said on Thursday that Trump's import tariffs have particularly weakened employment and overall business prospects for small businesses.

He noted that small businesses purchase 40% of U.S. imports from China, 31% from Canada, and 22% from Mexico.

Holtz-Eakin stated in a statement that businesses with fewer than 500 employees hired over 60 million workers in 2023, accounting for nearly half of the U.S. workforce. "These jobs are at risk from tariffs."

However, the Federal Reserve's 12 regional banks reported on Wednesday in their so-called "Beige Book" that tariffs have prompted businesses of all sizes to be cautious in hiring.

According to the Atlanta Fed, which compiled the report: "Several districts reported that businesses are taking a wait-and-see approach to hiring, pausing or slowing recruitment until the economic outlook becomes clearer."

The report noted that shifts in U.S. trade policy have cast a shadow over an otherwise steady economic outlook. "Economic activity changed little from the previous report, but uncertainty over international trade policy was prevalent across all 12 Federal Reserve districts."