If you were expecting a massive tariff impact, think again – but there is a still a stark warning
Despite the market volatility caused by the Trump Administration's ‘Liberation Day’ tariffs at the beginning of April, unemployment held steady in the month, and more jobs were created than forecasted. However, experts caution that those effects may still be on the horizon.
The US Bureau of Labor Statistics released the updated jobs numbers on Friday. Nonfarm payroll employment increased by 177,000. This was a decline from the 185,000 jobs created in March, but the total beat the April estimate of 130,000 new jobs.
The unemployment rate held steady at 4.2%. However, the number of long-term unemployed workers who have been jobless for 27 weeks or more increased by 179,000 to 1.7 million.
Lawrence Yun, chief economist at the National Association of Realtors, sees the economy continuing to grow despite market volatility.
“Income growth is outpacing consumer price inflation,” Yun said. “Regardless of what may be happening on Wall Street, where half of the stock market valuations are held by the top 1% of the population, Main Street America continues to move forward. Homeowners across the country are also faring well as housing equity continues to reach new record highs.”
The solid jobs report has President Donald Trump again calling for the Federal Reserve to cut interest rates at next week’s meeting. He went to Truth Social and posted his thoughts on Friday morning.
“Just like I said, and we’re only in a TRANSITION STAGE, just getting started!!!” Trump posted. “Consumers have been waiting for years to see pricing come down. NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!”
Experts caution headwinds remain in volatile market
While the jobs report may have been good news, many industry experts believe there could be slowdowns ahead. Sam Williamson, senior economist with First American, believes there could be trouble on the horizon.
“Downside risks to payrolls remain, largely due to government layoffs and firms delaying hiring,” Williamson said. “Some firms are reportedly preparing for layoffs, but announcements remain scarce. Meanwhile, lagging indicators, such as the February Job Openings and Labor Turnover Survey, show a steady weakening of demand for labor, with fewer vacancies and the lowest hiring rate in roughly a decade outside the pandemic, though employers remain reluctant to cut jobs.”
Mike Fratantoni, senior vice president and chief economist with the Mortgage Bankers Association, agrees that tariff-impacted sectors could see job cuts in the future.
“In April, job gains were concentrated in just a few sectors, including health care and transportation and warehousing,” Fratantoni said. “We expect that transportation and warehousing jobs are at risk as the tariff effects kick in. Federal government employment decreased by 9,000 in April and is down 26,000 so far this year. Given the plans for further reductions, it is likely that this category will also shrink in the months ahead.”
Fratantoni also notes that even though the unemployment rate held steady in April, the duration of unemployment increased, and, with fewer job openings, it is harder to find another job once unemployed.
“While the unemployment rate has not increased in recent months, there continues to be increases in the duration of unemployment spells,” Fratantoni said. “Given the declining number of job openings and the slow pace of hiring, for those who lose a job, it is getting tougher to find a new one.”
Experts believe the Fed will hold steady
Despite Trump’s social media pleas for the Federal Reserve to cut rates next week, Williamson believes the Fed will hold off as it awaits the true impact of tariffs.
Trump’s first 100 days exposed a deep rift in the mortgage industry. Rising rates, tightening credit, and fears over worsening affordability have split experts: those betting on the resilience of housing, and those warning of a looming crisis. https://t.co/UvXilMznGp
— Mortgage Professional America Magazine (@MPAMagazineUS) April 29, 2025
“With the labor market staying strong, the Federal Reserve will likely extend its ‘wait-and-see’ approach to further interest rate cuts as it assesses the impact of tariffs,” Williamson said.
Fratantoni notes that despite the signs that the economy is slowing down, the jobs report might just be enough good news to allow the Fed to remain in a holding pattern.
“Despite the financial market volatility in April and expectations of a sharp slowdown in economic activity in the coming months, these data will be enough to keep the Federal Reserve on the sidelines for now, as they assess whether the threat to economic growth or inflation is the bigger concern. Mortgage rates are likely to stay within their current range as well.”
The good news was concentrated in several industries that gained jobs in April, including healthcare, transportation and warehousing, financial activities, and social assistance. Federal government employment, a target of the Department of Government Efficiency (DOGE) lost jobs again in April.
Yun notes that despite all the economic challenges, the jobs report was overall a positive sign that it continues despite the headwinds.
“Jobs were created in construction, professional business services, and health care sectors,” Yun said. “Moreover, the overall job gains indicate increased occupancy demand for apartment and commercial buildings. Therefore, nearly 10,000 jobs were added to the real estate sector, primarily related to rental and leasing activity. The economy is progressing despite all the trade and tariff disruptions.”
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