The number of Americans applying for unemployment aid for the first time recorded a decline last week, indicating that the labor market remained stable throughout April. However, the uncertainty caused by President Donald Trump's tariff policy is starting to raise concerns among the business sector.
According to the US Labor Department, initial applications for unemployment aid fell by 9,000 to 215,000 for the week ending April 12. This figure is better than economists' expectations of 225,000 applications. So far, large-scale layoffs in the federal government sector have not had a significant impact on the labor market.
However, Trump's action to impose tariffs on almost all imported goods has sparked a trade war, especially with China, and raised concerns about high inflation and an economic downturn. Frequently changing policies also make it difficult for businesses to plan and invest, while also preventing the desire to add workers.
Federal Reserve Chairman Jerome Powell, in his remarks at the Chicago Economic Club on Wednesday, acknowledged the high level of uncertainty in the economy. He said the Federal Reserve's goal remains maximum employment and price stability, but acknowledged that progress towards those goals may stall throughout the year.
Even though the rate of layoffs remains low, weak business sentiment has caused many economists to expect unemployment to rise in the coming months. This week's data showed a continued increase in claims to 1.885 million for the week ending April 5, an early sign that the jobs market may be facing pressure.
