The U.S. economy added 157,000 jobs during the month of July, indicating that the labor market remains largely unaffected by President Donald Trump’s trade war — for now.
Friday’s figures, released by the Department of Labor, also showed that the unemployment rate fell from 4 percent to 3.9 percent.
Manufacturing jobs continue to dominate, hiring almost twice as many people as this time last year.
Economists predict that Trump’s punitive tariffs, which have set off various rounds of retaliatory taxes from America’s trading partners, will eventually have a negative impact on the country’s supply chain, stymie global growth, and bruise international trade relations.
But for now, the president’s $1.5 trillion fiscal stimulus plan and tax overhaul have shown success in keeping the labor market buoyant and the economy robust.
“The U.S. is in a better position to ride through the tariff concerns because of a strong economy,” Sung Won Sohn, chief economist at SS Economics, told Reuters. “But those fears could materialize going forward if things get worse.”
The only sticking point remains wage growth, at just 2.7 percent.
“It’s giving us a sort of ‘Groundhog’s Day’ feeling,” said Mark Hamrick, senior economic analyst at Bankrate. “With inflation running at a roughly 2 percent rate, that means that there’s not a lot of financial wiggle room for many Americans — even in the face of an economy that’s generally regarded to be robust.”
The Federal Reserve, which concluded a two-day monetary policy meeting on Wednesday, left interest rates unchanged, noting that “the labor market has continued to strengthen and economic activity has been rising at a strong rate.”
However, Trump-nominated Fed chair Jerome “Jay” Powell testified last month before Congress that tariffs had indeed harmed American companies.
“We don’t see it in the aggregate numbers yet because it is a $20 trillion dollar economy and these things take time to show up,” he warned. “We hear many many stories of companies that are concerned and are now beginning to make investment decisions, or not make them, because of this.”