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The picture of a steady job market, even if backward looking, reassured investors worried about a trade-induced economic slowdown.
May 2, 2025Updated 2:17 p.m. ET
The latest message from the data on the U.S. economy is simple: So far, so good, until further notice.
The labor market remained in a healthy state of balance as America entered a global trade war in April. U.S. employers added 177,000 jobs last month, the Labor Department reported on Friday. And the unemployment rate was unchanged at 4.2 percent.
Both numbers were based on surveys taken in the immediate wake of the Trump administration’s move in early April to institute the highest level of tariffs on imports since the 1930s, although some of those levies have been paused for 90 days. The payroll gains extended the streak of U.S. job growth to 52 months.
Data released earlier this week showed that the U.S. economy contracted in the first three months of the year. But that was largely a result of a surge in imports as firms and households bought goods to try to get ahead of the tariffs. The trajectory of trade and consumer spending going forward remains unclear.
The picture of a steady job market, even if slightly backward looking, was reassuring for investors, who have been parsing through economic data for signs of a trade-induced deterioration. The S&P 500 rallied after the release and has now erased all its losses from early April.
“What we can take away from today is that the U.S. economy has entered the trade war on strong footing,” said Rebecca Patterson, a senior fellow at the Council on Foreign Relations and former chief investment strategist at Bridgewater Associates. “But the longer tariffs are in place and the higher the tariff levels are, the greater the risk that this optimism quickly fates.”
