U.S. businesses continued to add jobs in April, demonstrating that the US economy continues to be resilient even as worries about tariffs, inflation, and depressed consumer confidence loom large over the economy.
The United States added about 177,000 jobs in April according to data released by the Bureau of Labor Statistics. The number, while a drop from March, exceeded most economists’ expectations. The unemployment rate held steady at 4.2%, unchanged from March.
Friday’s report tops off a busy week of economic data that have presented murky and at times contradictory indications about where the U.S. economy is heading. For weeks, economists and analysts have been anxiously peering over numbers for signs that President Donald Trump’s tariffs are starting to drag down the economy. This report adds one more piece to this foggy puzzle.
The data, while strong, comes with a major caveat – it’s drawn from early April, just after President Trump announced his latest round of tariffs, meaning it’s still too early to see the full effect they’ll have on the economy.
“Overall, the report shows that the job market was growing moderately in April,” said Daniel Zhao, lead economist at Glassdoor. “But the elephant in the room is that we’re not seeing the full impact from tariffs. So even though the report was better than expected, it’s a look in the rearview mirror.”
The report included positive points in the transportation and warehousing sector, which added 29,000 jobs. This came amidst a 41% spike in imports in the first quarter of the year as companies scrambled to ship in goods before Trump’s tariffs came into effect. But as tariffs take hold and shipping slows, analysts worry that those jobs may end up being temporary.
“There’s a fair amount of behavior going on of businesses and individuals trying to front-run the tariffs,” said Nancy Vanden Houten, senior economist at Oxford Economics. “We expect, based on other things we’re seeing, that that will reverse in the months ahead.”
Despite the positive top-line numbers, fears abound in the broader economy as corporations and consumers alike brace for what most expect will be an economic shock. The Port of Los Angeles expects shipping traffic to fall off soon due to a drop-off in imports. Some companies are starting to sound warning bells, with McDonald’s reporting drops in same-store sales this past quarter and General Motors expecting to lose billions in revenue due to tariffs. There are also signs that consumers are also fearful. The University of Michigan’s consumer sentiment index for April was down 32% since the start of the year. The survey, which gauges consumers’ feelings about the economy, reflects increasing fear among the public that a recession is on the horizon.
For economists, there is little doubt that President Trump’s economic policies will harm the economy. The question is simply when and how much.
“There’s an emerging effect that’s coming from uncertainty,” said Jonathan Millar, senior economist at Barclays Capital. “Businesses are uncertain about the overall economic environment and that’s not good for hiring.”
Some businesses are already feeling the effects of President Trump’s policies. As Canadian tourists increasingly shun the U.S., businesses that relied on those visitors are worried.
Matt Levy, the owner Spread Love Tours in New York City, has already seen a drop-off in tour groups this year. In April 2024, he ran 95 tours; last month, he ran 70. He points to a drop in Canadian bookings, which are down about 40% to 50% so far this year.
“Because the American President is such a bully, that means that Canadian groups and students are going to stay in Canada and support their economy,” he said. “And I don’t blame them.”
Levy is particularly worried about his guides, most of whom are freelancers and get paid only for the tour sessions they run. Of the 15 guides he works with, he may only be able to keep 8 or 10 if the downturn continues. He’ll also have to reduce the hours for the guides he keeps, cutting them from around 20 tours a month to a dozen or less. He described the effects on his team as heartbreaking.
“Not only do they need to find other work to support their families, but there’s emotional and psychological hardship in losing what they love to do,” he said.
As the impacts of tariffs begin to ripple through the economy, shift workers like Levy’s tour guides will likely be the first to feel the economic slowdown as businesses trim back on hours.
“It can be really difficult, especially for low-wage workers who are more likely to experience this because they have a lot of uncertainty in what their ultimate wages will be,” said Liz Pancotti, managing director of policy and advocacy at Groundwork Collaborative. “This is far more prevalent for hourly workers than for salary workers, and it really affects family budgets to not even know ‘Am I gonna make $1,000 this week or $500 this week?’.”
Other businesses are experiencing the effects of high prices and wallet tightening at home. Sunny Mahavadi owns a chain of gas stations and convenience stores in Martinsburg, W.Va. Most of his money is made from selling snacks like chips and soda. But his sales have been down since January even as wholesalers have raised prices for him. A bag of chips that he used to sell for $1.79, for instance, now goes for $2.69.
“People have a limit,” he said. “They have to put gas in their car, maybe they want to buy a snack. But now they’re limiting what they buy. So they may pass on the soda.”
As the cost of living goes up, some of Mahavadi’s five employees are asking for raises. But with profits down and margins thin, he can’t afford it.
“Right now, we’re hoping it’s going to get better,” Mahavadi said. “It’s a business, you gotta be in it in the good times and the bad times. We’re hoping for a better future.”