US manufacturing sees job losses despite Trump’s hopes of a revival
US manufacturing suffered 1,000 job losses in April in a blow to President Trump’s hopes to drive up employment in the sector.
Trump’s ‘Liberation Day’ tariffs set out to cut the country’s goods deficit as he looked to protectionist measures to revive the country’s stuttering manufacturing sector.
But new data showed no immediate improvement to the sector after tariffs were slapped on the likes of China and Canada.
The US Bureau of Labor Statistics said the sector saw a drop in manufacturing payrolls following two straight months of increases.
The fall was lower than that seen in January, when 5,000 fewer employees on payrolls were recorded compared to the previous month, and last October’s drop of 46,000 when a strike took place at Boeing.
The number of hours spent by workers in factories dropped far below average levels to 40.4 a week, reflecting plummeting levels of activity in the sector at large.
Pantheon Macroeconomics chief US economist Samuel Tombs said it would be “astonishing” if further hits to manufacturing eased in the coming months since US ports have reported lower activity levels over the last fortnight.
Wider labour market figures for April were viewed in a positive light by economists as US employers added 177,000 jobs.
The unemployment rate was unchanged at 4.2 per cent while wage growth was up 3.8 per cent compared to the same time last year.
Capital Economics’ North America economist Bradley Saunders said: “Admittedly, these figures were far larger than we had expected given that unauthorised immigration has fallen to near-zero recently.
“However, we are wary of reading too far into one data point from a notoriously volatile survey.
“The important point is that, with border crossings down sharply and deportations set to ramp up, weaker labour force growth will limit how far the unemployment rate is able to rise this year, even as employment growth slows.”
President Trump was quick to react to the US statistics body’s latest release on Truth Social with demands: “we’re only in a TRANSITION STAGE, just getting started!!! Consumers have been waiting for years to see pricing come down. NO INFLATION, THE FED SHOULD LOWER ITS RATE!!! DJT.”
The so-called “DOGE effect” also came through as federal employment declined by 9,000 last month after Elon Musk forced through more layoffs on public sector staff.
Trump could yet sign trade deals with the likes of India and the UK, which could single out Britain as a beneficiary of the global trade war relative to the US president’s treatment of other countries.
Tariffs exceeding 100 per cent remain for all imports of Chinese goods as well as 25 per cent tariffs on all vehicles.
The president has budged slightly on some of his most aggressive policies.
He allowed US factories to pay less on car parts they import after complaints from powerful industry players such as General Motors.