President Donald Trump’s tariffs are testing the United States’ job market. Friday’s jobs report reportedly will give people a clearer picture of what one can expect going forward.
“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 reportedly expect the May jobs report, slated for release at 8:30 a.m. ET 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.
READ: Trump doubles down on steel and aluminium with his tariffs (June 4, 2025)
“This is a market where there are stops and starts, and there are pullbacks in hiring,” Nela Richardson, chief economist at payroll giant ADP, said Wednesday.
Richardson added that when there’s a lot of uncertainty with establishments, especially small establishments, it doesn’t mean that the demand isn’t there but the timing may be off and that firms would rather wait and see than hire aggressively.
“The weak numbers we’re seeing now does not point to a labor market that’s collapsing, but there is hiring hesitancy,” said Richardson.
“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.”
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 (BLS) data released earlier this week.
Trump’s broad tariffs have increased input costs across manufacturing, agriculture, and retail sectors. Companies like Stellantis have already laid off hundreds of workers, and farmers are struggling due to retaliatory tariffs from countries like China.
According to the Challenger’s report, 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.
The U.S. job market is facing growing pressure due to President Trump’s tariff-driven economic strategy. According to the report, 228,000 jobs were added in March—but by May, the pace slowed significantly, with just 130,000 jobs added.
While the U.S. job market has not collapsed, it is clearly under stress. The Trump administration’s tariff-heavy trade policy has created economic headwinds across multiple sectors, leading to slower job growth, rising layoffs, and increased business caution. If these trends continue without strategic intervention—such as tariff revisions, economic stimulus, or international trade negotiations—the labor market may slide further, potentially dragging the broader economy closer to recession territory by the end of 2025.