behind the numbers
Experts are pointing to escalating trade tensions as a significant factor behind May's disappointing jobs report.
The U.S. economy added just 75,000 jobs in May, coming in significantly below analysts' expectations. This comes amid trade tensions with China and Mexico, and Wells Fargo Securities senior economist Tim Quinlan told NPR that "there's increasing evidence that the ongoing trade war here is beginning to have some tangible effects on the U.S. economy."
CNN business correspondent Christine Romans similarly noted in a Friday segment that a "big headline" out of the jobs report is that "Trump's tariff wars could be denting confidence," while CNN global economist analyst Rana Foroohar said that the jobs report was "absolutely" affected by trade tensions. Foroohar also concluded that chances are "high" that the Federal Reserve cuts interest rates.
Martha Gimbel, Indeed.com's Hiring Lab research director, noted to The Washington Post that "the slowdown is really coming from the sectors that are most susceptible to trade tensions like manufacturing, construction, mining and logging," noting that this "does make me worried," while Bank of the West economist Scott Anderson told The New York Times that "the May jobs report gives us a taste of what’s ahead if these trade threats continue to escalate."
Former Council of Economic Advisers Chair Jason Furman pointed to a slowdown in wage growth as being both "surprising and worrying," although he argued that the actual jobs number itself was "unsurprising and not worrying" because "we would expect job growth to slow."
This jobs report comes as the deadline looms for President Trump to sign an executive order putting into effect tariffs on Mexico, which a report earlier this week suggested could cost more than 400,000 jobs. Indeed, The New York Times' Ben Casselman notes that the "biggest job losers in the manufacturing sector in recent months have been automakers — which could get worse if Mexico tariffs take effect."