Last June, after almost a full year on the job hunt, Jordan Williams landed a role at a high-growth, United Kingdom-based outdoor apparel brand that was looking to build out its US operations. Passenger Clothing was well-positioned for expansion: The company landed orders with REI, Scheels and others, and Williams, an outdoor industry veteran, was excited for the ride. Until April. “Upon Liberation Day,” Williams said, nodding to the moniker President Donald Trump assigned to his blowout tariff announcement on April 2, “I was liberated from employment.” Overnight, the US went from being Passenger’s biggest potential growth driver to its biggest existential threat. For every $1 million of recycled fabrics, organic clothing and other products that landed in the US from countries such as India and China, Passenger was responsible for an additional $500,000 of duties, the company said in a mid-April statement announcing the pause of its US operations. Williams officially lost his job on April 11. Economists have warned early layoffs like Williams’ could be the first signs of labor market fallout from Trump’s steep (and shifting) tariffs, which have ramped up uncertainty testing the nimbleness of businesses of all sizes. Friday’s jobs report will provide some hints as to how much US employers are able to bend before they break. “The labor market is good, but it’s not exceptional, and we’re in the process of putting some real strain on the economy,” Claudia Sahm, New Century Advisors chief economist, told CNN in an interview. Economists expect that the May jobs report, slated for release Friday morning, could show the labor market is softening. The consensus forecast is for the economy to have added 130,000 jobs, slowing from a stronger-than-expected 177,000 gain in April, and for the unemployment rate to hold at 4.2% for the third consecutive month, according to FactSet estimates. Hesitation on the hiring front The Labor Department’s weekly jobless claims report has shown higher numbers of first-time claims last month as well as people who have remained on unemployment for multiple weeks. Continuing claims, which are filed by people who have received unemployment insurance for at least a week or more, continue to bump up against a three-and-a-half-year high. “This is a market where there are stops and starts, and there are pullbacks in hiring,” Nela Richardson, chief economist for payroll giant ADP, said Wednesday “With establishments, especially small establishments, when there’s a lot of uncertainty — it doesn’t mean that the demand isn’t there but the timing may be off — and firms would rather wait and see than hire aggressively.” The hiring rate, the number of hires as a percentage of total employment, ticked higher in April to 3.5% but remains below pre-pandemic levels, according to Bureau of Labor Statistics data released earlier this week. And by ADP’s count (which doesn’t always correlate with the official jobs report) hiring dropped off precipitously in April and May, when the private sector gained 60,000 and 37,000 jobs, respectively. “The weak numbers we’re seeing now does not point to a labor market that’s collapsing, but there is hiring hesitancy,” Richardson said Wednesday. “It’s like driving through fog for some of our firms here,” she added. Federal workforce hit the hardest by job cuts Though the ripple effects from various Trump policies could take longer to show up in the data, the federal workforce reductions have already started appearing. The federal government posted job losses for three consecutive months, dropping 13,000 jobs in February, 4,000 in March and 9,000 in April, BLS data shows. More losses could be spread over many months to come: Not all federal workers were laid off immediately, and other actions are being challenged in court. Through May, announced job cuts are running significantly higher than in recent years; however, the lion’s share of the cutbacks have come from the federal government. Department of Government Efficiency-related cost-cutting and its downstream effects have led to more than 294,000 announced job cuts, according to Challenger, Gray & Christmas data released Thursday. Another 131,257 announced cuts have been attributed to “market/economic conditions,” while 2,097 have been directly tied to tariffs. “Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies’ workforces,” Andrew Challenger, senior vice president of the outplacement and coaching firm, said in a statement. “Companies are spending less, slowing hiring, and sending layoff notices.” DOGE’s actions and economic uncertainty have driven job cut announcements significantly higher than last year: Through the first five months of the year, employers have announced 696,309 job cuts, an 80% increase from the comparable year-ago period, according to the Challenger report. Despite the increase in announcements, layoffs appear to be shrinking. In May, employers announced 93,816 job cuts, a decrease of 12% from April. Also, jobless claims (a proxy for layoffs) and the rate of layoffs and discharges remain below pre-pandemic levels, Labor Department data shows. Still, the impacts from tariffs might very well by a slow burn, economist Claudia Saum said. “We are still early days,” she said.
Friday’s jobs report could show how much US employers will bend before they break
TruthLens AI Suggested Headline:
"US Jobs Report to Reflect Impact of Tariffs and Economic Uncertainty on Labor Market"
CNN
6.6
TruthLens AI Summary
Jordan Williams, who had recently secured a position with the UK-based outdoor apparel brand Passenger Clothing, found himself without a job following President Trump's tariff announcements in April. The tariffs significantly impacted the company’s operations in the U.S., turning the market from a promising growth opportunity into a major liability. As Passenger announced a pause in its U.S. operations due to the financial strain from increased duties on imported goods, Williams officially lost his job on April 11. This situation has raised concerns among economists about potential early signs of a broader labor market downturn, particularly as businesses grapple with the uncertainties brought on by shifting tariffs. The upcoming jobs report is expected to shed light on these trends, with predictions of a slowdown in job creation, reflecting a labor market that, while stable, is showing signs of strain under economic pressures.
The Labor Department’s recent reports indicate a rise in jobless claims and a slowing hiring rate, suggesting that employers are becoming cautious in their hiring practices amidst ongoing economic uncertainty. Although the hiring rate ticked up slightly, it remains below pre-pandemic levels, indicating hesitance among employers. Furthermore, the federal workforce has already begun to experience job cuts, with significant losses reported over the past three months. The cumulative impact of tariffs, funding cuts, and economic pessimism has led to an increase in announced job cuts, with 696,309 cuts reported in the first five months of the year, marking an 80% increase from the previous year. Despite these alarming figures, some experts, like Claudia Sahm, caution that the full effects of these policies might take time to manifest, suggesting that the labor market is not on the verge of collapse but is experiencing significant challenges that could evolve in the coming months.
TruthLens AI Analysis
The article focuses on the implications of recent job losses in the U.S. labor market, particularly through the lens of an individual’s experience with a company affected by trade tariffs. It highlights the broader economic context and anticipates the release of an upcoming jobs report that is expected to reveal a potential softening in the labor market.
Impact of Trade Policies
The narrative begins with the personal story of Jordan Williams, who lost his job due to the fallout from tariffs implemented by the Trump administration. This case serves as a microcosm of the larger economic challenges faced by businesses reliant on international trade. The article implies that the tariffs, meant to protect U.S. industries, are instead posing significant risks to employment and economic stability.
Labor Market Conditions
Economists are quoted expressing concerns about the state of the labor market, suggesting that while it is still relatively strong, it is showing signs of strain. The upcoming jobs report is framed as a crucial indicator of the resilience of U.S. employers. The article presents the consensus forecast of job growth and stable unemployment rates, hinting at a potential slowdown in hiring, which could have wider implications for economic growth.
Public Sentiment and Fear
The article potentially aims to evoke anxiety among readers regarding job security and the overall health of the economy. By detailing a personal story of a job loss and linking it to broader economic policies, it creates a narrative that may resonate with many individuals currently facing uncertainty in their employment situations. This could lead to a heightened sense of urgency for policy changes or economic support measures.
Possible Omissions
While the article sheds light on the negative impacts of tariffs, it may downplay any potential benefits of such policies for certain sectors or the economy at large. By focusing on job losses, it might not provide a balanced view of the trade policy’s outcomes, which could lead to a skewed perception of the overall economic situation.
Manipulative Elements
The framing of individual stories in the context of broader economic policies can create an emotional response, which may skew public perception. The use of specific anecdotes can evoke sympathy and concern, potentially pushing readers toward a particular viewpoint regarding trade policies. This narrative technique can be seen as manipulative if it selectively presents information to provoke a desired reaction.
The reliability of the article is moderate, as it combines personal testimonies with economic forecasts, which inherently carry some level of uncertainty. It is grounded in real experiences but could benefit from a more comprehensive analysis of the economic landscape, including potential positive outcomes of current policies.
In conclusion, the article raises valid concerns about the current state of the labor market while also possibly amplifying fears regarding economic stability. The focus on individual narratives combined with economic predictions serves to engage readers but may also lead to an imbalanced understanding of the complexities of trade policies and their effects.