US Labour Market Holds Steady for Now; Tariffs Keep Businesses on Edge

• The number of Americans filing new applications for unemployment benefits increased marginally last week, suggesting the labour market remained resilient despite darkening clouds over the economy caused by a chaotic trade policy. On the other hand, President Donald Trump's constantly shifting tariffs position has heightened economic uncertainty, sharply eroding business and consumer confidence, which could undercut spending and lead to job losses.
• Signs of caution among businesses, evident in surveys and corporations cutting financial guidance, were reinforced by other government data on Thursday showing business spending on equipment barely rose in March. Economists expect the labour market to weaken by the second half of the year.
• "Businesses are not squeezing labour costs just yet," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "Job losses are coming later this year in sectors most exposed to tariffs, such as retail, transportation and manufacturing, if the current menu of tariffs is maintained."
• Initial claims for state unemployment benefits increased 6,000 to a seasonally adjusted 222,000 for the week ended April 19, in line with economists' expectations. The Labour Department data included the Good Friday holiday, which was later this year compared to 2024. Claims tend to be volatile around moving holidays.
• Since his "Liberation Day" tariffs announcement early this month, Trump has delayed reciprocal duties on more than 50 trade partners by 90 days, while raising tariffs on Chinese imports to 145%. Beijing retaliated with duties of its own.

(Source: Reuters)