The U.S. job market may be in trouble soon, especially as President Donald Trump enforces stricter immigration policies, which could hurt the number of workers in the U.S. However, the impact is not fully felt yet. Economists predict that the U.S. Labor Department will report that 135,000 new jobs were added last month, a decent number, but much lower than March’s surprising 228,000 jobs. The unemployment rate is expected to stay low at 4.2%.
Some economists, like Brian Bethune from Boston College, believe the job market is still doing well, with a forecast of 150,000 new jobs in April. But many experts are worried that the market could decline soon. Trump’s high taxes on imports are likely to increase costs for businesses in the U.S., especially those that rely on products from other countries. This could make it harder for businesses like hotels, restaurants, and construction companies to hire people.
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Elon Musk’s Department of Government Efficiency (DOGE) also poses a risk, possibly cutting jobs within the government and in private companies. Lydia Boussour, an economist at EY, warns that the combination of higher tariffs, market uncertainty, and cuts to the government workforce could slow job growth even further. She predicts that the unemployment rate might rise to 5% by 2025.
Boussour is not as optimistic as other economists and expects only 65,000 jobs to be added in April. There have been early signs of a slowdown. For example, payroll provider ADP reported that only 62,000 jobs were added in April, half of what was expected. This is down from 147,000 jobs in March. Nela Richardson, ADP’s chief economist, said, “Unease is the word of the day,” as it’s tough for businesses to make hiring decisions right now.
Additionally, more Americans are filing for unemployment benefits. While 241,000 claims were reported last week, it’s still a relatively low number, but higher than expected. Trump’s policies have caused market instability and concern among consumers, with the Conference Board showing the lowest consumer confidence since the COVID-19 pandemic started.
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Despite these challenges, employers are still hesitant to lay off workers, remembering how difficult it was to rehire people after the 2020 pandemic layoffs. “They had a hard time getting people back,” said economist Bethune, and that’s why the unemployment rate and jobless claims are still low by historical standards.
Bethune doesn’t expect the cuts in federal jobs, ordered by Musk’s DOGE, to show up in the April job numbers. Some of the government workers who left were forced into early retirement and aren’t counted as unemployed.
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Economists Samuel Tombs and Oliver Allen predict 150,000 jobs will be added in April, but they expect the numbers to fall to around 100,000 per month in May and June, as business confidence drops. If the job market continues to weaken, the Federal Reserve may decide to cut interest rates to help boost the economy. After lowering rates three times last year, the Fed has been cautious about further cuts, waiting to see how Trump’s tariffs affect prices. A weaker job market could push the Fed to make changes sooner.
