Last week the Commerce Department announced an unexpected drop in new orders for manufactured goods, which declined by a whopping 3.7% in the month of April. This drop far surpassed what analysts had anticipated, with the Dow Jones projection predicting a drop of just 3.3%. That’s a sharp reversal after a booming March where new orders jumped by 3.4%. So many companies were clamoring to get themselves prepared ahead of President Donald Trump’s tariffs.
In April, it wasn’t just the raw materials— shipments of manufactured goods also slipped slightly, down 0.3%. Even with the drop in new orders and shipments, unfilled orders held mostly steady during the month. Inventories slipped by 0.1%, a sign that supply chains are beginning to tighten.
Overall, the April labor market showed very mixed signals. The ratio of available jobs to unemployed workers fell to 1.03 to 1, approaching the ratio last recorded in March. Nonetheless, this ratio does signal a modest tightening in the job market and is still near last month’s numbers.
Economists noted that quits, which are typically thought of as a measure of worker confidence, fell by 150,000 to 3.2 million. In an ironic counterpoint to all this new hiring, layoffs jumped by 196,000, to 1.79 million for the month. In better news, hiring was on the upswing, increasing by 169,000 to 5.6 million hires.
The unemployment rate will remain at 4.2%. This stability is welcomed news as the job market contends with a host of other economic headwinds. Economists are forecasting the addition of around 125,000 jobs next month. This is down from the 177,000 jobs added in April.
Jeffrey Roach, chief economist at LPL Financial, commented on the current state of the labor market:
“The labor market is returning to more normal levels despite the uncertainty within the macro outlook.”
Raphael Bostic, president of the Atlanta Federal Reserve Bank, remarked:
“For many sectors, I’m not hearing that the labor markets are changing in material ways.”
This complex reality of manufacturing and employment underscores a broken cycle of demand and workforce insecurity. As businesses respond to external pressures and economic policies, they continue to adapt their strategies to navigate challenges while aiming for growth in an evolving market.