Market Beats | US to Resume Student Loan Collections as Defaults Mount; US Job Growth Strong in April; Apple Gets Downgraded Over Tariff Risks; New York MTA to Cut Costs to Balance $68.4 Billion Capital Plan; Florida Housing Boom Reverses as Prices Drop Most Since at Least 2012

—— US Job Growth Strong in April; Apple Gets Downgraded Over Tariff Risks; US to Resume Student Loan Collections as Defaults Mount; New York’s MTA to Cut Costs to Balance $68.4 Billion Capital Plan; Florida Housing Boom Reverses as Prices Drop Most Since at Least 2012

1. US Job Growth Strong in April

US employers added 177,000 jobs in April while the unemployment rate held at 4.2%, according to Friday’s Bureau of Labor Statistics report. The prior two months’ payroll gains were revised slightly downward.

The data indicates that businesses haven’t yet made significant hiring cuts despite heightened uncertainty over President Donald Trump’s tariff policies and recent financial market volatility. Economists expect any drag from the trade war to become more visible in coming months.

“This is a good jobs report all around,” said Olu Sonola, head of US economic research at Fitch Ratings. “The ‘R’ word the labor market is showing is resilience, not recession. But we should temper our optimism as trade policy risks still loom large.”

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2. Apple Gets Downgraded Over Tariff Risks

Apple Inc. was downgraded by at least two firms on Friday following its latest earnings report, which reignited concerns about the company’s exposure to tariffs and limited growth momentum.

Jefferies downgraded the stock to underperform, one of the few bearish calls on Apple. Analyst Edison Lee said that while the quarterly results met expectations, “the tariff impact will expand over time to create more earnings downside.”

Apple’s results revealed weaker-than-expected sales in China and forecast $900 million in higher costs due to tariffs. The company said it expects revenue to grow in the “low- to mid-single digits” in the current quarter compared to a year earlier.

Shares fell 4.3% on Friday, extending their year-to-date drop to 19%. Still, the stock has rebounded nearly 18% from April lows.

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3. US to Resume Student Loan Collections as Defaults Mount

The US Department of Education will restart collection efforts on defaulted federal student loans this summer, officially ending more than five years of leniency as consumers face growing economic stress fueled by the Trump administration’s trade policies.

Wage garnishments for borrowers not making payments will begin “later this summer,” the agency said, estimating that roughly 25% of its $1.6 trillion student loan portfolio may now be in default due to accumulating overdue balances.

No involuntary collections have occurred since March 2020, when pandemic forbearance measures paused most student loan payments. It wasn’t until October 2024 that defaults began appearing again on credit reports.

Bloomberg Economics estimates that rising loan defaults — coupled with trade-driven economic uncertainty — could reduce annual US consumer spending by as much as $63 billion.

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4. New York’s MTA to Cut Costs to Balance $68.4 Billion Capital Plan

The Metropolitan Transportation Authority (MTA) is seeking $3 billion in cost savings through 2029 to balance its $68.4 billion multi-year capital plan aimed at modernizing New York City’s aging transit infrastructure.

MTA Chief Executive Officer Janno Lieber said Wednesday that the agency will not take on additional debt to close the gap, following a directive from Governor Kathy Hochul earlier this week. “I don’t want anyone to assume that we’re going to be piling on the borrowing,” Lieber said after an MTA board meeting. “We’re very committed to maintaining the right debt-service ratio in our operating budget.”

Lieber expressed confidence that the agency could find operational efficiencies to avoid delaying or canceling critical upgrades. Some savings have already been achieved by bundling similar capital projects to lower costs.

As of March 20, the MTA carried $47.7 billion in debt, including $25.7 billion tied to fare, bridge, and toll revenues. Around $13 billion of that total is connected to the agency’s capital plan.

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5. Florida Housing Boom Reverses as Prices Drop Most Since at Least 2012

Florida’s once-surging housing market is now cooling rapidly, with home prices in March falling by the most in at least 13 years, according to Redfin Corp.

The median price for all home types declined 1.7% year-over-year in March, the steepest drop since Redfin began tracking the data in 2012. Demand is falling as the pandemic-fueled influx of out-of-state buyers fades, and home sales have followed suit. Inventory has surged to a record high, signaling a notable shift in market dynamics.

Affordability has been further strained by rising insurance premiums and persistently high mortgage rates. The state’s condominium sector is under even greater pressure, with ownership costs soaring after new legislation mandated stricter inspections and reserve requirements in response to the 2021 Surfside condo collapse. Many sellers now face difficulty closing deals due to hefty special assessments for building maintenance.

“A lot of it is driven by the condos, but it seems that the single-family market is also weakening,” said Redfin senior economist Sheharyar Bokhari. “The pandemic rush to Florida is dying down, and with mortgage rates being so high and staying high, it makes it really unaffordable for people paying for those high prices.”

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6. US Supply Chains Face Looming Crisis as Trump’s Tariffs Take Hold

President Donald Trump’s sweeping tariffs on Chinese goods, raised to 145% in early April, have already triggered a sharp decline in cargo shipments — by as much as 60% according to some estimates. While American consumers have yet to feel the full impact, shortages and higher prices are imminent.

By mid-May, retailers such as Walmart Inc. and Target Corp. are warning of empty shelves and price hikes as inventories deplete. Apollo Management’s chief economist Torsten Slok has likened the situation to “Covid-like” shortages, predicting significant layoffs in trucking, logistics, and retail sectors.

Though Trump has recently signaled some willingness to adjust tariffs, experts warn it may be too late to prevent a supply shock that could affect the US economy through the holiday season.

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7. US Mortgage Rates See Biggest Weekly Jump in a Year, Threatening Spring Home Sales

US mortgage rates rose for the first time in four weeks, posting the largest weekly gain since April 2024 and threatening to cool the housing market during the crucial spring buying season.

The average rate for a 30-year fixed loan climbed to 6.83% from 6.62% the previous week, Freddie Mac said in a statement Thursday.

The surge comes as global tariff tensions — particularly between the US and China — have rattled equity markets and pushed up yields on 10-year US Treasuries, which serve as a benchmark for mortgage pricing.

“When [the 10-year yield] rises, mortgage rates typically follow suit,” said Jiayi Xu, an economist at Realtor.com. “Looking forward, competing economic forces are pulling mortgage rates in opposite directions, making it increasingly difficult to predict where they’ll land.”

Demand is already showing signs of weakening. According to data from Redfin Corp., home-purchase contracts in the four weeks ending April 13 fell 0.8% from a year earlier.

“Consumers are feeling anxious about the economy and the rising cost of living, potentially leading them to adopt a ‘wait-and-see’ approach regarding significant purchases like homes,” said Kara Ng, senior economist at Zillow Home Loans.

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