The labor market was much healthier than expected in March, but some economic analysts are worried that the cascading effect of President Donald Trump's blanket tariffs could push hiring in the other direction. While the market added 228,000 jobs last month — far higher than the monthly average of 158,000 jobs over the past year — financial experts are expressing skepticism that this job boom is here to stay.
'Ill-positioned' labor market The job market has "proved surprisingly resilient," even as the economy has been "buffeted by rapid inflation, high interest rates and political instability," said Ben Casselman and Colby Smith at The New York Times. But Trump's tariffs "could be enough to shatter what had arguably been the economy's final source of support" in the market.
"The saying 'past performance is no guarantee of future results' could apply to this jobs report," said Stephanie Hughes at Marketplace. Rising prices due to tariffs will lead employers to pull back on hiring and could eventually spark layoffs. If the economy "isn't growing as fast" or at all, "you don't need as many workers," Sarah House, an economist at Wells Fargo, said to the Times.
The labor market is "ill-positioned to withstand new shocks from elevated uncertainty, increased tariff costs, cuts to government spending and employment, and weakening business and consumer sentiment," said Veronica Clark, an economist at Citigroup, to Reuters. Plus, more people "faced long bouts of joblessness though the median duration of unemployment has eased, and multiple job holders continued to rise," Lucia Mutikani said at Reuters.
Job creation? Not every sector is hit equally, as hiring has "remained stable in some industries, including health care and technology," Debra Boggs, the CEO of research firm D&S Executive Career Management, said to CNBC. The Trump administration has "argued that while tariffs may drive up prices, they will also help fuel job creation stateside, particularly across manufacturing," said Pavithra Mohan at Fast Company.
But the tariffs "by themselves don't guarantee that outcome," said Tobias Burns at The Hill. They could be a "component of a broader industrial strategy if policies favorable to workers are advanced as well, such as those supporting higher wages and limiting the adoption of job-replacing automation." However, there's "little evidence of a broader worker-protection agenda being advanced by the Trump administration so far." |