Washington: The US government on Friday said that the gainful employment figures of 233,000 in May and 159,000 in April has helped to drive the nation’s unemployment rate to an 18-year low of 3.8 %.
Amidst all that hiring, the trump administration has imposed heavy tariffs on steel and aluminum from Europe, Mexico and Canada.
Additionally, the White House is threatening China with separate duties. In response to the tariff war, Mexico, Canada and China have vowed to hit back at US goods.
However, these trade disputes have not affected the 9-year-old economic expansion in the US and the hiring has picked up in comparison to 2017.
“The May jobs report revealed impressive strength and breadth in US job creation that blew away most economists’ expectations,” said Scott Anderson, chief economist at Bank of the West.
Despite the positive statistics, some of the economists are wary of Trump administration’s aggressive actions on trade which could eventually disrupt the growth.
Though there would be a negligible effect of tariffs on $20 billion US economy, a persistent uncertainty about trading partners would lead to retaliatory penalties to the US, which could hamper expansion prospects for some companies.
“Risks are brewing … with the latest round of tariffs on aluminum and steel,” said Joseph Song, an economist at Bank of America Merrill Lynch. “However, the concerns so far remain on the periphery.”
Should the trade fights worsen, they would most likely affect some of the same industries that have ramped up hiring and lifted the economy. Manufacturers, for example, have added 259,000 jobs in the past year, a 2.1% increase. That’s the biggest percentage gain in factory jobs since 1995.
(With agency inputs)