Reuters: tariff uncertainty could weaken US labor market this year

Last week, the number of Americans filing new applications for unemployment benefits increased just slightly. However, according to Reuters, these dynamics alone are not an indisputable sign of stability in the labor market.

The news agency reports that President Donald Trump's ever-changing position on tariffs is increasing economic uncertainty in the United States and undermining business and consumer confidence. This could lead to employers cutting back on spending and laying off workers.

Initial jobless claims rose by 6,000 to a seasonally adjusted 222,000 in the week ending April 19, meeting economists' expectations.

On Wednesday, the US Federal Reserve released the Beige Book showing a trend among companies to suspend or slow hiring in some states. This was reinforced on Thursday by fresh data showing that business spending on equipment barely rose in March. Economists at Pantheon Macroeconomics expect a weaker labor market and job cuts in the second half of the year if the current list of tariffs remains unchanged.

JP Morgan also points to tightening immigration policy, a contributing factor to weak employment not reflected in official data.