A Jobs Warning for Trump - WSJ Editorial
Mr. Trump understandably talks up the job creation on his watch, so he should heed Friday’s Labor report that showed a sharp pullback in hiring. The labor-market warning reinforces other evidence that the uncertainty caused by scattershot tariffs is now hurting employment as well as investment.
Employers added a mere 75,000 jobs last month, but even these paltry gains were erased by the Labor Department’s downward revisions for April and March. Job growth has averaged 164,000 this year compared to 223,000 in 2018 and 217,000 during Barack Obama’s second term. The jobs trend this year is going in the wrong direction. The unemployment rate held at 3.6%, the lowest in 50 years. But labor-force participation is stuck at 62.8% and workers don’t appear to be leaving the sidelines like they were last year. The U.S. labor force has lost 583,000 workers since January, the first springtime decline since 2013.
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Hiring may also be cooling in part because employers are struggling to find workers to fill job openings. Yet the uncertainty from the risk of a multi-front trade war is sinking in. A month ago the Trump Administration was close to an agreement with China before talks collapsed and the President slapped 25% tariffs on $200 billion in goods. Then out of the blue last week Mr. Trump announced escalating tariffs on Mexico as punishment for unspecified derelictions on immigration. Those tariffs, which may or may not take effect Monday, would hit $350 billion in imports including consumer electronics and automotive parts that cross the border multiple times. Businesses that were moving supply chains out of China to Mexico could get soaked and also have to worry about Mexican tariff retaliation.
Tariffs have already slammed farm exports and income, but the effects of trade uncertainty are rippling out. Farm equipment and chemical manufacturers have reported lower orders. Businesses are delaying investment decisions. Global trade flows are slowing, and commodity prices are down...The May jobs report is a flashing yellow light that Mr. Trump needs to settle his trade wars and get back to promoting growth.
https://www.wsj.com/articles/a-jobs-warning-for-trump-11559945631 (paid subscription)
