WASHINGTON: Defying fears of a global trade war, US businesses have made it abundantly clear that they see no reason to stop hiring.

Employers added a robust 233,000 jobs in May, up from 159,000 in April, the government said on Friday, and helped drive the nation’s unemployment rate to an 18-year low of 3.8 per cent.

In the midst of all that hiring, the Trump administration has slapped tariffs on steel and aluminum from Europe, Mexico and Canada. The White House is also threatening China with separate duties. And Europe, Mexico, Canada and China have vowed to hit back at US goods.

Yet so far, the trade disputes have done nothing to knock the nearly 9-year-old economic expansion the second-longest on record off track. Hiring has actually picked up this year compared with 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.

Some economists do remain concerned that the Trump administration’s aggressive actions on trade could eventually hamper growth. The direct impact of the tariffs on the nearly $20 billion US economy will likely be scant. But persistent uncertainty about which trading partners might be hit next and which US products might be penalised in retaliatory moves could disrupt some companies’ expansion plans.

“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 2.1pc increase. That’s the biggest percentage gain in factory jobs since 1995.

Exports have been a big driver of that hiring. In 2017, simultaneous growth in Europe, China, Japan, and some developing countries were a key reason that factory output rose. Now, European officials are threatening to raise tariffs on Harley-Davidson motorcycles and on Levi’s jeans.

Roughly an hour before the May employment data was released on Friday morning, President Donald Trump appeared to hint on Twitter that a strong jobs report was coming.

“Looking forward to seeing the employment numbers at 8:30 this morning,” he tweeted.

The president is normally briefed on the monthly jobs report the day before it is released, and he and other administration officials are not supposed to comment on it beforehand.

Larry Kudlow, the president’s top economic adviser, downplayed Trump’s tweet.

“He didn’t give any numbers,” Kudlow said. “No one revealed the numbers to the public.” Investors cheered the jobs data. The Dow Jones industrial average finished up 219 points. Other stock indexes also rose.

The healthy employment figures make it more likely that the Federal Reserve will keep raising interest rates this year two and possibly three more times, after doing so in March.

Unemployment dropped from 3.9pc in April. When rounded to one decimal, as the Labour Department typically does, the official jobless rate is now the lowest since April 2000. For women, unemployment has fallen to 3.6pc, the lowest since 1953.

But the unrounded figure is 3.75pc, the lowest since December 1969, when it was 3.5pc. Unemployment remained below 4pc for nearly four straight years in the late 1960s before reaching 6.1pc during a mild recession in 1970. It didn’t fall below 4pc again until the dot-com-fueled boom of the late 1990s.

With the unemployment rate so low, businesses have complained for months that they are struggling to find enough qualified workers. But Friday’s jobs report suggests that they are taking chances with pockets of the unemployed and underemployed whom they had previously ignored.

Unemployment among high school graduates fell sharply to 3.9pc, a 17-year low. For black Ame­ri­­cans, it hit a record low of 5.9pc.

And the number of part-time workers who would prefer full-time jobs is down 6pc from a year ago. That means businesses are converting some part-timers to full-time work.

Companies are also hiring the long-term unemployed those who have been out of work for six months or longer. Their ranks have fallen by nearly one-third in the past year.

That’s important because economists worry that people who are out of work for long periods can see their skills erode.

Those trends suggest that companies, for all their complaints, are still able to hire without significantly boosting wages. Average hourly pay rose 2.7pc in May from a year earlier, below the 3.5pc to 4pc pace that occurred the last time unemployment was this low.

Published in Dawn, June 3rd, 2018