2 May 2025
If you are covering the latest US jobs data, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“On the surface the latest US employment report looks to be fairly healthy. 177,000 jobs were added to the economy, which is considerably higher than the 130,000 expected, while the unemployment rate stayed steady at 4.2%. While Donald Trump was happy to claim this is a Biden economy after the poor GDP reading earlier this week, he will no doubt claim that the tariff uncertainty is having little impact on the US, with the labour market seemingly trundling on.
“However, this latest jobs figure is still down markedly from what was a bumper month in March, and the fear is that this is the start of a more considerable slowdown. First quarter economic growth in the US was negative, raising the possibility of the world’s largest economy tipping into recession. Consumers are cutting back while job vacancies are getting harder to fill as the Trump administration cracks down on immigration. With tariff uncertainty continuing to reign supreme, all of this is painting a picture of businesses struggling in America and the potential for future disappointments on the jobs front.
“A potential quickening of this slump may just get the Federal Reserve to act on interest rates, however. So far, Jerome Powell has stood firm that it will not be influenced by the words of Donald Trump and cut rates sooner than it would like. There remains inflationary risks and uncertainty across the market, particularly given what happens after the 90-day pause on reciprocal tariffs is unknown. The Fed will not want to cut rates into a market of rising inflation, but should other economic indicators start flagging trouble, it may have no choice but to do what Donald Trump wants it to do – cut interest rates.”
