In this video, Vanessa Welch, Empower vice president for financial insights, and Marta Norton, Empower chief investment strategist, reflect on the latest jobs report covering April 2025 and how economic indicators stand ahead of next week’s Fed meeting. Here is a transcript:

Marta Norton: The hard numbers from January through today have remained relatively strong.

Vanessa Welch: Good morning. I'm Vanessa Welch, here with Marta Norton, our chief investment strategist, to break down the first jobs report since Liberation Day. Marta, Wall Street was closely watching for signs of a tariff impact, but the labor market remains strong. What's your first take?

Norton: I mean, by and large, we're looking at a positive report here. We saw payrolls come in above expectations at 177,000 jobs added this past month. Unemployment held steady at 4.2%. Wage growth did tick down a touch relative to expectations — so, 0.2% relative to 0.3%. But that 0.2% number is in line with the Fed's 2% inflation target. So, maybe it's actually some positive news there. There were revisions to the March and February numbers, bringing down what labor looks like in those months.

So potentially a little bit weaker of a labor market than we had thought, but by and large, I think this report reinforces the idea that the labor market is generally healthy and any effects from tariffs will take some time to show up in reports.

Welch: Interesting. So with tariffs and a federal hiring freeze in effect, Marta, when do you think we will start to see the first real impact?

Norton: OK, so this report is really measuring that initial period right after Liberation Day. And the expectations as companies adjust to a tariff world is that there will be some changes to how they're managing their expenses over the course of time. So I really think the full effects of this tariff world — if it remains in place as it is today — will take the next several months to work their way through.

Now, the DOGE effect is alive and well in the reports. That effort has been in place for longer. And so we did see federal jobs decline this month. And in fact, the Bureau of Labor Statistics points out that we've seen 26,000 jobs decline in the federal government space since January.

So there is some of that effect working through the numbers today. However, the BLS also points out that folks who are on paid leave or severance are still counted as employed. So those numbers will still have some effect in the months to come.

Welch: Yeah, that is really helpful context. We know, Marta, that the Fed is closely watching the labor market for any signs of weakness as it anticipates slower growth from the Trump administration's tariff policy. I'm curious what your outlook is for next week. How do you see the Fed responding?

Norton: Sure. So the Fed has said that it's really oriented toward the hard numbers, those quantitative measurements of the economy. And the hard numbers from January through today have remained relatively strong. And with today's report, we have another set of strong numbers on our hands. So as the Fed is getting real-time views of how the economy is evolving — and as it's balancing its concerns around inflation with the labor market — it's hard to imagine that they're going to put in a cut as early as next week. However, as we start to see the numbers evolve, we could see the Fed make a move later in the summer.

Welch: Yeah, today's jobs report shows the labor market remains steady, but it's clearly facing new headlines from tariffs and policy changes. Marta, thank you as always for your insights. This was super helpful. We're going to be back next week with Marta's analysis of what the Fed's decision could mean for the economy. Have a great weekend.