April jobs report: Job market awaits tariff shock

The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor’s Lead Economist Daniel Zhao.

The job market continued growing in April as the impacts of President Trump’s Liberation Day tariffs announced on April 2 are yet to be fully felt. Economic uncertainty and early tariff impacts have not yet triggered foreshocks and the full impact of tariffs will take many months to play out. Ultimately, today’s jobs report highlights a job market that was growing at a moderate pace before the tariff shock arrives in full force.

Key stats:

Tariff foreshocks ahead of main shock

The April jobs report likely includes little reactive impact from the April 2 tariffs as their dramatic size and scope were unexpected and the reference week for the jobs report didn’t allow enough time for businesses to act in a way that would show up so soon. The impacts we’ve seen so far in other data are foreshocks that haven’t yet arrived in the job market as of the April jobs report.

Even the May jobs report may still be too early for tariff impacts to begin showing up. Many shipped goods were already en route when the tariffs went into effect and inventory buildup from tariff front-running should sustain businesses in the immediate term.

Once backlogs from tariff front-running fade though, transportation employment may be the first industry to see impacts from the tariffs as demand for shipping goods drops. Transportation & warehousing jobs growth has been surprisingly strong in the last few months with an increase in couriers & messengers (+8,400 in April) and warehousing & storage (+9,800) sub-industries, which may be due to a surge in last-mile delivery ahead of tariffs.

Manufacturing is also at risk due to tariffs. Manufacturing employers reliant on imported inputs may also begin furloughing workers if their input costs are prohibitively high. In April, politically prominent manufacturing subindustries like computer and electronic product manufacturing (-4,000) and motor vehicles and parts (-4,700) also shrank slightly.

It’s likely the full impact of the tariffs won’t be clear until the summer or fall. In the medium term, as inventories start to dry up, businesses will face more pressure to raise prices or accept product shortages. Businesses that rely on consumer spending may also start cutting costs by laying off workers. Leisure and hospitality employment could also be sluggish heading into the summer in areas reliant on international tourism, especially from countries targeted by the administration like Canada or China.

Ultimately, a major asterisk is that the impact of tariffs depends on how they are actually implemented. With tariff policy shifting on a near-daily basis, forecasting the economic impact is near-impossible and this also creates an additional drag on economic activity as businesses are faced with enormous uncertainty, making it difficult to go forward with investment or hiring plans. Additionally, the Federal Reserve is caught between a recession rock and an inflation hard place—tariffs are likely to boost prices in the short-term while also slowing the economy, giving the Fed little flexibility to support the economy in accordance with its dual mandate.

More insights

Payroll employment grew by 177,000 in April, above expectations of about 130,000 jobs added. March was revised down from 228,000 to 185,000. Jobs growth has been volatile month-to-month in the last half-year, but has not shown a meaningful trend change upward nor downward.

Federal payrolls shrank another 9,000 in April, following a 4,000 job decline in March, due to the federal hiring freeze & DOGE workforce cuts. Federal jobs growth is now below the pace of private jobs growth post-Covid. State & local governments added 19,000 jobs in April as they continue to rebound from Covid.

With a longer view, jobs growth in less-cyclical sectors like healthcare, education and government has slowed. That gives less buffer for the job market against recession if cyclical sectors turn down amid weaker economic conditions later in the year.

Average hourly earnings grew at 3.8% year-over-year in April, the same rate as March. Notably, the 3-month annualized growth rate for wages has slowed more dramatically to 2.6%. This data can be volatile, but this is a concerning data point to watch for in coming months as tariffs crimp household budgets.

Unemployment was flat at 4.2% in April, continuing its plateau over the last year, married with a tick up in the labor force participation rate to 62.6% from 62.5% in March.

Both prime-age (25–54) employment-population ratio and prime-age labor force participation rate ticked up slightly after some softening at the start of the year.

Asian unemployment dropped 0.5 percentage points in April down to 3% while the unemployment rate for Black, white and Hispanic/Latino workers all rose 0.1 percentage point. A useful reminder is that these rates are volatile month-to-month so we shouldn't draw too many conclusions from 1-month changes.

To speak with Daniel Zhao about this report, please contact pr@glassdoor.com.