For fans of the US stock market, the non-farm payroll report for April (2 May) was the proof they needed ‘exceptionalism’ is alive and well in terms of the economy.

According to the Bureau of Labour Statistics, there were 177,000 new jobs created last month, compared with economists’ forecasts of 133,000 and a ‘whisper number’ of 120,000, meaning Wall Street was braced for a negative surprise rather than a positive one.

Before we get the flags out, however, it’s worth bearing in mind payrolls aren’t and never have been a leading indicator, they are a lagging indicator.

High-frequency data – such as weekly jobless claims – are also typically a lagging indicator, but it’s worth flagging the last few reports have been disappointing so it may take until next month’s payroll report for us to get a truer picture of labour market conditions.

What we do know is consumer confidence has plunged, with the Conference Board’s main index hitting a five-year low in April and the expectations index collapsing to the lowest level since 2011.

According to the Wall Street Journal, the survey included ‘an especially dark view of the labour market’.

Around a third of people surveyed said they expect there to be fewer jobs in the next six months, nearly as many as during April 2009 in the recession which followed the global financial crisis.

For middle- and low-income households, that fear of whether or not they will have a job in the next six months is stopping them from consuming, as the big retailers flagged clearly at the beginning of April and as McDonald’s (MCD:NYSE) confirmed in its latest earnings.

That pessimism is shared by business leaders, with the latest manufacturing PMI survey showing production down, new export orders down, sentiment about future output at a 10-month low and the first job losses in six months.

We also know trade with China is grinding to a halt, with deliveries to ports such as Los Angeles down by a third from normal levels.

According to LA port director Gene Seroka, interviewed by Bloomberg, the US supply chain has five to seven weeks’ worth of stock to get through before shortages begin to appear, but even if a deal with China were announced tomorrow ‘you can’t just flick a switch and turn trade back on’.

All the while tariffs stymie exports to the US, Chinese factories are finding other buyers – as a Beijing spokesman observed, ‘other people have money too’ – and where factories are dormant, the government can afford to support workers and wait it out, so the pain is likely to be very one-sided.

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