“Total nonfarm payroll employment increased by 177,000 in April, and the unemployment rate was unchanged at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in health care, transportation and warehousing, financial activities, and social assistance. Federal government employment declined.”
Even though the U.S. economy contracted in the first quarter of 2025 for the first time in three years, nonfarm payroll jobs increased 177,000 in April, as employers aren’t yet ready to cut their workforce in the beginning of the second quarter, even though many businesses have stopped ordering from foreign suppliers for the holidays because no tariff agreements have been made or are even in negotiation, especially with China.
The universal April 2 tariff announcements on all 180 countries in the world have already begun to hurt manufacturing, as the manufacturing sector lost 1,000 jobs. Reuters reports the Institute for Supply Management’s manufacturing PMI dropped to a five-month low of 48.7 last month, as tariffs are already raising prices on strained supply chains, keeping prices at the factory gate elevated and encouraging some firms to lay off workers.
Gene Seroka, executive director of the Port of Los Angeles, said Tuesday on CNBC’s “Squawk Box” that he expects incoming cargo volume to slide by more than a third next week compared with the same period in 2024, especially with China that makes of 45 percent of Los Angeles Port imports.
“According to our own port optimizer, which measures the loadings in Asia, we’ll be down just a little bit over 35% next week compared to last year. And it’s a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs,” Seroka said.
But the Education/Health sector added 70,000 jobs, Transporting/warehouse added 29,000 jobs, so the service sector is still healthy. There seems to the hope that Trump will have some kind of tariff agreements in 90 days, but with whom and when means domestic production will be affected, since so many US businesses import parts as well as iPhones.
So looking ahead, the employment picture won’t look so good. Reuters also reported that the Labor Department report showed initial claims for state unemployment benefits jumped 18,000 to a seasonally adjusted 241,000 for the week ended April 26. The number of people receiving benefits after an initial week of aid soared 83,000 to a seasonally adjusted 1.916 million during the week ending April 19. Global outplacement firm Challenger, Gray & Christmas said that planned job cuts fell 62 percent to 105,441 last month. Layoffs were, however, 63 percent higher.
It looks like the April unemployment report is a picture of what was, not what is to come. Consumers are also eating out less.
The NYTimes reports McDonald’s among other large food vendors have reported weaker sales in the first three months of the year.
“PepsiCo cut its full-year guidance outlook assuming that demand for its beverages and snacks will soften. Chipotle, the burrito giant, reported that its same-store sales fell for the first time since 2020 in the most recent quarter. Both companies attributed the results to customers’ feeling apprehensive about the economy.”
It will become more difficult to hide the wholesale destruction the Trump administration is about to wreak on the U.S. economy, not only due to the tariffs, but because Trump and Republicans have weakened most of the laws and congressional mandates that affect economic growth, such as by cutting much of the funding for President Biden’s New, New Deal, so that all now depends on the gut instincts of one man who believes he can run the country and the world.
Harlan Green © 2025
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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