The Job Market Has Been Resilient. The Trade War Could Be Its Undoing.

The U.S. economy has largely withstood inflation and high interest rates. But tariffs could bring new price increases and put a damper on hiring.

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The U.S. economy has largely withstood inflation and high interest rates. But tariffs could bring new price increases and put a damper on hiring.

Any pullback in hiring is likely to show up first in industries that are directly hurt by tariffs, like retailers that sell imported goods.Credit...Mark Abramson for The New York TimesApril 3, 2025Updated 2:59 p.m. ET

For three years, the U.S. economy has been buffeted by rapid inflation, high interest rates and political instability at home and abroad. Yet it has proved surprisingly resilient, supported by the sturdy pillars of robust consumer spending, a rising stock market, and healthy balance sheets for households and businesses alike.

But one by one, those pillars have begun to crack under the weight of tariffs and uncertainty. The all-out global trade war that President Trump declared on Wednesday could be enough to shatter what had arguably been the economy’s final source of support, the strong job market.

“The strength of the consumer is coming down to the jobs market,” said Sarah House, an economist at Wells Fargo. “And it’s increasingly perilous.”

The sweeping tariffs that Mr. Trump announced on Wednesday, and the duties that U.S. trading partners quickly imposed in retaliation, sent stock indexes around the world tumbling on Thursday. The effects won’t be limited to the financial markets: Economists say tariffs will raise prices for consumers and businesses, which will lead employers to pull back on hiring and, if the tariffs remain in place long enough, lay off workers.

“If the economy isn’t growing as fast, or it isn’t growing at all, you don’t need as many workers,” Ms. House said.

Economists will get their latest glimpse of the job situation on Friday, when the Bureau of Labor Statistics will release March figures on hiring and unemployment.

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