The U.S. economy may create 130,000 jobs last month as Trump’s trade war slapped fears of recession fears
When the Labor Department released jobs in March on Friday, it is expected that they will indicate that U.S. businesses, government agencies and nonprofits added 130,000 jobs last month, down from 151,000 jobs in February, according to a survey of forecasters by data company FACTSET. The unemployment rate in March is expected to reach as much as 4.2% votes from 4.1% in February.
These will be shocking, but not scary. But the worry is that things may get worse.
President Donald Trump’s trade war – including the “Liberation Day” import tax he announced Wednesday – threatens to raise prices, interrupt commerce and invite retaliatory tariffs from U.S. trading partners.
The president promises to deport millions of immigrants working illegally in the United States. Over the past few years, these workers have eased labor shortages and helped the economy grow. If they are deported or fearful of the job market, companies may have to cut their jobs or raise their wages and raise prices, and may support inflation.
Similarly, Elon Musk’s Ministry of Efficiency (DOGE) liquidated the federal labor force to threaten to weigh the labor market and increase unemployment. Despite this, the impact of Musk’s shooting has just begun to appear. “We don’t want Doge-driven layoffs to be a considerable drag,” wrote Shruti Mishra, an economist at Bank of America, in a commentary. “The numbers are too small to move needles in the wider labor market.”
Mishra predicts 185,000 new jobs last month, much higher than the consensus among economists, in part because she expects to rebound in recruiting hotel and hotel companies in leisure and hotel companies after being pushed down by unusually cold weather in January and February.
The job market has been cooling since the red recruitment date of 2021-2023. Employers added 151,000 jobs in February and 125,000 jobs in January. Not bad, but it fell from last year’s average monthly average to 216,000 in 2023, 380,000 in 2022, and a record 603,000 in 2021, as the economy recovered from the lockdown speed of Covid-19-19.
Very durable in the face of high interest rates.
In 2022 and 2023, the Fed raised its benchmark interest rate to 11 times to combat inflation. Economists expect higher borrowing costs, putting the United States in recession. But they didn’t. Consumers are spending continuously, employers are recruiting, and the economy is growing.
Inflation fell – lowered the Fed three times last year. But subsequent progress against inflation has stalled, forcing the Fed to postpone more tax cuts this year.
Now, concerns about economic health are growing. The University of Michigan Consumer Sentiment Survey last month showed that two-thirds of U.S. consumers expect unemployment to increase in mid-next year — the highest reading in 16 years.
“The U.S. economy was in good shape in the early second quarter, but the ongoing trade war greatly increased the risk of a recent recession,” Ershang Liang of PNC Economics wrote in a comment on Thursday.
Still, if one comes, this slowdown may not be seen in Friday’s work numbers.
Thomas Simons, chief economist at Jefferies, said March numbers could swell due to seasonal adjustments and eventually get lower revisions in the coming months. “This time in the labor market may be worse than it is now after we see more data and end up with many revisions,” he wrote in a comment on Thursday.
