Job market shrugs off trade war (for now)

Data: Bureau of Labor Statistics; Chart: Axios VisualsThere is little evidence of trade war pain in the job market, which kept chugging along last month with strong hiring and low levels of joblessness.Why it matters: If America's economy is buckling under President Trump's trade regime, Friday's all-important jobs report shows that employers did not get the memo — at least, as of mid-April.The data is far from an "all-clear" signal, but it does suggest to policymakers that the economy was on decent footing in the immediate aftermath of the April 2 "Liberation Day."What they're saying: "In one line: Resilient so far in the face of uncertainty, but a shakeout in goods-related employment looms," said Sam Tombs, an economist at Pantheon Macroeconomics. "April's payroll report provides a snapshot of labor demand in the run-up to the April 2 tariff announcements, rather than an early assessment of their impact," Tombs added.By the numbers: There were 177,000 payrolls added last month, slowing just slightly from the 185,000 added in March — which, notably, is about 43,000 payrolls fewer than the Labor Department initially forecast.The April gains were on pace with the average monthly gain of 152,000 jobs added over the previous year. The unemployment rate held at a historically low 4.2%, while a broader measure of joblessness — which includes workers available for jobs and part-time workers — ticked down. The share of employed prime-age workers, those aged between 25-54, rebounded sharply after two straight months of declines. It stands at 80.7%, the largest share since September. Between the lines: Federal employment continued to decline as Trump pursues government cutbacks. The sector has shed 26,000 jobs since the beginning of the year, including 9,000 fewer payrolls in April.But the full DOGE effects are not apparent: The Labor Department classifies those on paid leave or receiving severance as employed.What to watch: Economists are certain that Trump's trade war will — or might already be starting to — weigh on hiring and the broader economy. Surveys of consumers and businesses support such forecasts.The question is when it will begin to show up in the data that helps guide the Federal Reserve's policy decisions.The intrigue: To estimate the headline payrolls figure, the Labor Department surveys businesses about the pay period that includes April 12."Nearly three-quarters of employees are paid either biweekly, semimonthly or monthly, so they would still count on April payrolls even if employers moved quickly to cut jobs after the April 2 tariff announcements," Tombs wrote. The bottom line: The U.S. economy is undergoing a massive shift in trade dynamics that have helped shape employment and consumption in recent decades. Whatever fallout is ahead could take months to become apparent in economic data.

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