April Jobs Report Preview: Hiring Likely Slows Amid Tariff-Driven Economic Uncertainty

The U.S. labor market is expected to show signs of cooling in April, as economic anxiety grows following President Trump’s recent tariff announcements. According to forecasts, Friday's jobs report is likely to reveal the addition of just 135,000 nonfarm payrolls, down significantly from March’s 228,000, while the unemployment rate is anticipated to hold steady at 4.2%.

This report, set to be released by the Bureau of Labor Statistics at 8:30 a.m. ET, will be the first major employment update since the April 2 introduction of Trump’s “Liberation Day” tariffs. Investors are watching closely to assess how the new trade measures may be impacting business hiring decisions.

Labor Market Faces Headwinds as Trade Policies Take Effect

March marked a strong month for job creation, but April could tell a different story. Analysts warn that the labor market may not yet fully reflect the consequences of recent trade policies, but early warning signs are emerging.

Economic indicators suggest that the tariffs are starting to weigh on growth. The Bureau of Economic Analysis reported that U.S. GDP contracted in Q1 for the first time in three years. A spike in imports before tariffs took effect, along with a slowdown in manufacturing activity, contributed to the pullback.

Consumer confidence has also taken a hit. Multiple sentiment surveys show Americans growing more cautious amid policy uncertainty, which may translate into softer job creation in the coming months.

“April’s employment data may still be too early to capture the full impact of the tariffs,” noted Citi economist Veronica Clark. “It largely reflects conditions in the first half of the month, before businesses had time to adjust.”

Unemployment Claims and Job Openings Show Signs of Softening

Unemployment claims spiked in late April, hitting their highest level in two months. Continuing claims also rose to levels not seen since November 2021, indicating growing stress in the labor market.

Private payrolls, as reported by ADP earlier this week, came in below expectations. Meanwhile, job openings at the end of March hovered near their lowest point since December 2020, signaling that employers may be pulling back on hiring.

Wage Growth and Fed Rate Outlook

Despite the slowdown, wages are still expected to rise moderately. Average hourly earnings are forecast to increase by 0.3% month-over-month and 3.9% year-over-year, slightly higher than March’s 3.8%. Average weekly hours worked are projected to remain unchanged at 34.2.

These figures could play a crucial role in shaping the Federal Reserve’s next move. Markets currently see a 60% chance the Fed may resume cutting interest rates at its June meeting, according to the CME FedWatch Tool.

Why This Jobs Report Matters

With inflation pressures lingering and economic growth showing signs of fatigue, the strength of the labor market remains a key pillar of U.S. economic resilience. April’s jobs data will help determine whether that pillar is beginning to crack under the weight of global uncertainty and evolving trade dynamics.

For investors, businesses, and policymakers alike, Friday's report will offer critical insight into where the U.S. economy might be headed next.