On Wednesday, April 9, 2025, we signed “We Are Employed” in the NC division of Work and Resource Fair, hosted by the Asheville Area Chamber of Commerce, in collaboration with NCWorks in Fletcher, North Carolina, USA.
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There is little doubt that employment was slowed considerably in May as businesses and consumers prevented higher tariffs and rising economic uncertainty. The main question is how much.
A small dip from recent trends is probably not considered a concern. But anything more could spark new fears about the labour market and the wider economy, perhaps pushing the Federal Reserve to faster-than-expected interest rate measures.
Economists hope that if the Bureau of Labor Statistics reports farm pay on Friday at 8:30am, it will show an initial tally of 177,000 in April and a profit of just 125,000, an average annual average of 144,000. It represents a slide, but not a collapse, and the market depends on the degree of decline.
“When you enter the NFP print, your expectations will reset low and about 100,000 reads (125,000 expected by consensus) could fall into a ‘not a bad’ camp,” writes Julian Lefague, chief market strategist at Barclays Private Bank. “All things under the 100,000 mark can rekindle the fear of a recession, but printed materials that are stronger than expected are likely to put upward pressure on (Treasury) yields, which can be conversely negative for risky assets.”
As a result, the report is a balancing act between slower labor market speeds and competing concerns about rising inflation.
Data tells a variety of stories
A wide range of emotional indicators, including manufacturing and services research, and small business sentiment gauges, show flags of optimism towards the economy, led by tariffs and concerns about inflation that may occur in the fire.
Additionally, this week’s hard data from ADP showed that private pay was essentially flat last month, growing at just 37,000 in May, the lowest in two years. The claims of unemployment have also been a hit since October, and have been on the rise recently.
Friday’s pay report could be a key arbitrator in determining how much concern it is in the important economy: the labor market.
“We think it’s going to be slower. I think tariffs will start to bite a bit,” said Dan North, senior economist at Allianz Trade North America. “Everyone hates the economy, but looking at the hard data isn’t that bad.”
North expects it will take months before sentimental surveys (“soft” data) hit other economic measures, such as pay.
The impact of tariffs is important
In the interim, the market will monitor further development on the trade front as President Donald Trump continues his 90-day negotiation window.
“We certainly don’t expect this month to be an economic weight from uncertainty, not just tariffs.
Wall Street has a variety of views from Goldman Sachs that are expected to expect to see a salary growth of under 110,000.
From there, investors try to figure out whether the latest numbers are moving the needle in the Fed policy. Currently, the market is not expecting further interest rate cuts until September. Most policymakers these days have focused on the effects of tariffs inflation, with warnings that they are looking at the number of jobs.
“One of the insights of encouragement regarding economic activity is the resilience of the labor market,” Governor Adriana Kugler said Thursday in New York. “We’ll get the May employment report tomorrow, and the data shows that employment continues to rise and labor demand is in a relative balance.”
The consensus estimates believe the unemployment rate is 4.2%, but average hourly revenue is projected to show a monthly profit of 0.3% and an annual increase of 3.7%.
