JP Morgan predicts US recession and job losses this year due to Trump’s new tariffs

JP Morgan has warned that the United States could slip into a recession this year because of new reciprocal tariffs announced by US President Donald Trump on his so-called “Liberation Day”.

In a note to investors, the bank’s chief US economist, Michael Feroli, said the American economy is likely to shrink under the pressure of these tariffs. He also predicted that the unemployment rate could rise to 5.3 per cent, according to a report by The Hill.

This warning came shortly after Trump introduced a sweeping tariff plan on 2 April, targeting around 60 countries.

Federal Reserve Chair Jerome Powell also voiced concern about the economic impact. Speaking at a business journalism event, he said the new tariffs are likely to hurt the economy more than expected. “The effects will likely include higher inflation and slower growth,” he said, adding that this could make the Fed’s job of managing inflation even harder.

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As per the new plan, a flat 10 per cent tariff will apply to imports from all countries starting 5 April. Then, from 9 April, countries with the largest trade deficits with the US will face even steeper, individual tariffs. India, for example, will be hit with a 26 per cent tariff on all its exports.

Despite this, global financial firm Jefferies offered a somewhat positive take on how this might affect India. The company pointed out that major Indian export sectors—such as IT services, pharmaceuticals, and cars—aren’t directly hit by the tariffs.

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Jefferies said the 26 per cent tariff is “reasonable” compared to what other countries are facing. But it also warned that a slowing US economy could still hurt demand for Indian exports, especially in tech services.

US economy adds 228,000 jobs in March, beating expectations

The US added 228,000 jobs in March , beating expectations and showing signs of recovery after deep federal job cuts under the Trump administration. This was up from 117,000 jobs in February. However, the unemployment rate still edged up slightly to 4.2 per cent. Economists had expected only 140,000 new jobs in March—lower than February and below the yearly average of 167,000.