The U.S. added 228,000 jobs in March, more than estimated and a substantial increase from February. The unemployment rate inched up to 4.2% as more people entered the workforce. Most of industries added jobs, albeit at a temperate pace, with gainers in transportation, education & healthcare, and leisure & hospitality. The government lost just 4,000 jobs as the round of layoffs occurred after the reporting period. Economists expect the number of government losses to be more substantial in the April job report. All-in-all, the job report reflected a relatively stable economy, but the coming months may show a rockier environment. 

KEY INDICATORS THIS WEEK

Institute for Supply Management (ISM) – The impact of the Trump tariffs was felt strongly in March, even before all the tariffs were fully in effect. The ISM Manufacturing survey dipped into contraction territory for the first time this year, falling 1.3 points to 49. All of the sub-indices in the measure were equally bad: prices paid were the highest in almost three years, new orders fell to the lowest level since May 2023 and employment was the weakest in six months. Survey responses centered on one key factor for the weakness – the uncertainty surrounding tariffs. Companies are reluctant to expand investment plans before knowing exactly what tariffs will be put in place. Chinese restrictions on critical minerals are causing major shortages on equipment production and supply chain continuity as well as price spikes. Inventory build-up increased the most since 2022 as companies rushed to import goods ahead of the tariffs. Producers are concerned they will not be able to pass on price increases if consumer demand continues to weaken. An analysis conducted by Bloomberg Economics suggests the surge in uncertainty could curb U.S. industrial production 1.1% by Q2 2026 and the global economy by 1.7%, relative to the baseline.

Tariff Update – Whatever side you’re on; President Trump’s new round of tariffs threw the financial markets into the safe haven of safe havens – Treasury yields fell 11 to 14 basis points overnight and key stock indices plummeted more than 3.5% on the open. The financial markets are worried that the new tariffs will push the U.S. economy into recession before economic growth is achieved. Economists estimate the tariffs could shave as much as 1.5% off the economy this year. Steep tariffs were imposed on all exporters to the U.S., with rates ranging from 10% to over 50%, to counter large trade imbalances with the U.S. This includes some of the country’s biggest trading partners such as China — which now faces a tariff of well above 50% on many goods — as well as the European Union, Japan and Vietnam. As expected, the move sparked threats of retaliation from our trading partners.