Trump Trade Wars Hit Home Is the US Jobs Boom Officially Over?

Article Heading: US Jobs Market Cools Amid Trade War Uncertainty

The latest jobs report signals a potential slowdown in the US economy, with **139,000 jobs added in May**. This figure represents a dip compared to the robust gains seen in previous months, raising concerns about the impact of ongoing trade tensions orchestrated by the Trump administration.

While April showed resilience in the labor market, seemingly weathering the storm of uncertain trade policies, May's data from the Bureau of Labor Statistics (BLS) paints a different picture. The **unemployment rate remained steady at 4.2%**, but the overall job creation numbers are undeniably softer.

Several factors contributed to this slowdown:

• Federal Job Cuts: The Trump administration's "department of government efficiency" (Doge) initiative led to the **loss of 22,000 federal jobs in May alone**. Since January, the government has shed a total of **59,000 federal positions**.
• Downward Revisions: The BLS also revised its figures for March and April, indicating that **95,000 fewer jobs were created over those two months than initially reported**.

In response to the report, former President Trump reiterated his call for the Federal Reserve to cut interest rates, publicly criticizing Chairman Jerome Powell (referred to as "Too Late") on Truth Social, urging for a significant rate reduction.

Economists had anticipated a potential cooling of the job market following earlier indicators. Here's a quick recap:

1. ADP Report: Payroll firm ADP reported a meager **37,000 increase in private-sector payrolls in May**, marking the lowest gain in over two years.
2. ISM Index: The Institute for Supply Management's purchasing managers' index registered at **49.9 in April**, the lowest reading since June 2024, signaling a challenging environment for manufacturers.
3. Consumer Sentiment: The University of Michigan's consumer survey showed stable sentiment from April to May.

The Long Shadow of the Trade War

The effects of the trade war are yet to fully materialize in inflation data. The annual inflation rate in April stood at **2.3%**, a slight decrease from March. Experts believe that the impact of tariffs will be gradual and may become more apparent later in the summer.

Looking Ahead

The May jobs report serves as a reminder that the US economy is not immune to global uncertainties. While the unemployment rate remains low, the slowdown in job creation and the looming effects of the trade war warrant close monitoring. It remains to be seen whether the summer months will bring a rebound or further evidence of a cooling economy. The coming months will be crucial in determining the long-term trajectory of the US labor market.

Tags: US economy, jobs report, unemployment rate, Trump trade war, federal jobs, labor market, job creation, economic slowdown, May jobs, Bureau of Labor Statistics

Source: https://www.theguardian.com/business/2025/jun/06/may-jobs-market-report