The job market was much healthier than expected in March, but some economic analysts are worried that the cascading effect of President Donald Trump’s blanket tariffs could push hiring in the other direction. While the market added 228,000 jobs last month — far higher than the monthly average of 158,000 jobs over the past year — financial experts are expressing skepticism that this job boom is here to stay.
Others, though, say that while the economy could crater due to Trump’s tariffs on almost every country in the world, the job market itself may not bear the brunt. But this does not necessarily mean that labor wouldn’t feel economic malaise as a result.
‘The labor market is ill-positioned’
The job market has “proved surprisingly resilient,” even as the economy has been “buffeted by rapid inflation, high interest rates and political instability,” said Ben Casselman and Colby Smith at The New York Times. But Trump’s tariffs “could be enough to shatter what had arguably been the economy’s final source of support” in the job market.
Companies typically pass the extra cost of the tariffs onto the consumer, which will “raise prices for consumers and businesses, which will lead employers to pull back on hiring and, if the tariffs remain in place long enough, lay off workers,” said Casselman and Smith. If the “economy isn’t growing as fast, or it isn’t growing at all, you don’t need as many workers,” Sarah House, an economist at Wells Fargo, said to the Times.
This gives economists reason for caution about the market. The “saying, ‘past performance is no guarantee of future results,’ could apply to this jobs report,” said Stephanie Hughes at Marketplace. One area where this has come to the forefront is the auto industry. If the “price goes up a lot, because the production costs have gone up a lot, the demand for those cars is probably going to fall,” UBS chief U.S. economist Jonathan Pingle said to Marketplace. This “probably means less workers to produce those cars.”
The “labor market is ill-positioned to withstand new shocks from elevated uncertainty, increased tariff costs, cuts to government spending and employment, and weakening business and consumer sentiment,” Veronica Clark, an economist at Citigroup, said to Reuters. Beyond this, more “people faced long bouts of joblessness though the median duration of unemployment has eased, and multiple job holders continued to rise as did permanent job losers,” Lucia Mutikani said at Reuters.
‘Hiring has remained stable in some industries’
Not every sector is hit equally, as “hiring has remained stable in some industries, including health care and technology,” Debra Boggs, the founder and CEO of research firm D&S Executive Career Management, said to CNBC. Instead of being out of jobs, some of “her clients are senior-level federal leaders now pivoting to the private sector.” But it is “so incredibly uncertain and unprecedented. I have no idea,” Boggs said.
The “Trump administration has argued that while tariffs may drive up prices, they will also help fuel job creation stateside, particularly across manufacturing,” said Pavithra Mohan at Fast Company. And when “analyzing the impact of tariffs levied during Trump’s first term, some economists found that manufacturing employment remained more or less unchanged; in other industries like agriculture, however, tariffs catalyzed job losses.” However, Trump’s first-term tariffs were also not nearly as widespread as his current plan.
When it comes to Trump’s claim that his tariffs will boost manufacturing jobs, the “tariffs by themselves don’t guarantee that outcome but could be a component of a broader industrial strategy if policies favorable to workers are advanced as well, such as those supporting higher wages and limiting the adoption of job-replacing automation,” said Tobias Burns at The Hill. But there is “little evidence of a broader worker-protection agenda being advanced by the Trump administration so far.”
Economic analysts are split on what the tariffs could mean for employees
