Key employment data is about to be released. Is the U.S. economic outlook hanging by a thread?

According to the Zhitong Finance APP, on Friday, the U.S. Department of Labor will release the April non-farm payroll report, which the market is closely watching to determine whether the U.S. economy is temporarily affected by tariff policies or is heading towards a more serious long-term decline. According to a consensus from a Dow Jones survey, economists expect an increase of 133,000 non-farm jobs in April, significantly lower than the 228,000 in March. However, this expected figure is not far from the average of 152,000 in the first three months of this year, which should keep the unemployment rate around 4.2%. However, if the data falls significantly below expectations, it could trigger market turmoil, especially against the backdrop of recent negative economic data and the Trump administration's aggressive tariff increases on trade partners, causing market anxiety. Mark Zandi, chief economist at Moody's Analytics, pointed out, "If the job growth is around 150,000, the market should be able to accept it. We would feel okay, although it wouldn't be optimistic, and it wouldn't lead to a collapse." However, Zandi also warned that the market may need to prepare for disappointment. He specifically mentioned that if job growth is below 100,000, it would be a dangerous signal. "If it's only 100,000 or even lower, I would start to be alert. The importance of other economic data would also increase, and people would lower their expectations for the economy, which could lead to a tough day for the market." A Series of Bad News Dampens Confidence Investors have already experienced a series of frustrating economic data this week: the first quarter U.S. Gross Domestic Product (GDP) contracted at an annual rate of 0.3%; the ADP private employment report was far below expectations; Labor Department data showed a significant reduction in job vacancies and an increase in unemployment claims; while inflation data was mixed. Despite this, the Dow Jones Industrial Average still recorded an increase of about 2% this week, as investors remain hopeful for the latest news from the White House regarding tariff policies. However, this market resilience could quickly crumble due to a poor employment report. Especially since there are already many signs indicating that the labor market is under pressure: the ADP report stated that only 62,000 jobs were added in April by private enterprises, far below market expectations; U.S. job vacancies have dropped to about 7.2 million, the lowest level since September 2024; the unemployment rate for recent college graduates surged to 5.8% in March, the highest since July 2021; at the same time, the underemployment rate (which includes part-time and underemployed individuals) soared to 41.2%, the highest since February 2022. Declining Wage Satisfaction and Federal Layoffs as Risks In addition to the decline in job numbers, workers' satisfaction with their current situation is also decreasing. Data from the New York Fed shows that wage satisfaction fell to 54.8% in March, the lowest level since November 2021. The "minimum acceptable wage" has dropped nearly 10% from its peak in November 2024 to $74,236, indicating a significant weakening of job seekers' confidence in the market. Moreover, the wave of federal layoffs has also cast a shadow over the economic outlook. Since President Trump took office in January, the "Department of Government Efficiency," led by Elon Musk, has laid off a total of 281,000 federal employees. According to the human resources consulting firm Challenger, Gray & According to Christmas statistics, if government contractors and grant project employees are included, Atlanta Federal Reserve researcher M. Melinda Pitts estimates that the actual layoff impact could reach as high as 1.2 million. These effects are expected to gradually emerge in the second half of the year after government severance payments run out. The economy may weaken but is not on the verge of collapse Citigroup predicts that 105,000 new jobs will be added in April. Economist Andrew Hollenhorst points out that while this level is not impressive, it may be just enough to keep the unemployment rate stable amid a slowdown in immigration. In addition to employment numbers, the market will also closely monitor wage data to assess whether inflation is cooling. The market generally expects that average hourly wages in April will rise by 0.3% month-on-month and increase by 3.9% year-on-year, slightly higher than the growth rate in March. This report will serve as a key barometer for determining whether the U.S. economy is entering a prolonged period of weakness. If the data unexpectedly shows weakness, it could reinforce the market's pessimistic outlook on the economic prospects; conversely, even if the results are merely "mediocre," it would be enough to temporarily soothe investor anxiety