The U.S. economy had another outsized month of new job gains in April, but downward revisions to prior estimates suggest some modest easing in the labor market ahead of the impact of tariffs and government-workforce cuts in coming months.
The Bureau of Labor Statistics reported 177,000 new jobs were created in April, a tally that topped Wall Street’s 138,000 forecast and the downwardly revised March reading of 185,000. February’s total was revised lower to a gain of 85,000.
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Average hourly earnings eased as well, falling 0.2% from the previous month and slowing to an annual pace of 3.8%, just inside Wall Street’s 3.9% forecast.
The headline unemployment rate, which tracks only those who are actively seeking new employment, held at 4.2%, while the labor force participation rate rose 0.1 percentage point to 62.6%.
President Donald Trump said earlier this week that Q1 GDP data represented ‘Biden’s economy.’
“Another stronger-than-expected jobs report is encouraging, although definitely not top of mind considering the ongoing uncertainty around tariffs and global trade,” said Joe Gaffoglio, president and chief executive at Mutual Of America Capital Management.
“While the labor market continues to be a bright spot, that could change quickly if the imposition of tariffs leads to disruptions in supply chains and global trade.”
“March’s 4.2% unemployment rate underscores resilience in the U.S. economy, but cracks have been forming,” he added. “Job openings continue to decline and steady quit rates suggest workers are growing less confident about jumping to new roles. Given the more cautious stance both by companies and workers, ongoing job market momentum will be closely watched.”
U.S. stock futures extended their premarket advance following the data release, with futures tied to the S&P 500 indicating a 42-point opening-bell gain and the Nasdaq called 133 points higher. The Dow Jones Industrial Average was last called 295 points higher.
Benchmark 10-year Treasury note yields rose 5 basis points to 4.266% following the data release while rate-sensitive 2-year notes rose 3 basis points to 3.739%.
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Earlier this week, data from payroll processing group ADP showed private sector hiring slowed sharply, falling to just 62,000 over April. Employers attempted to “reconcile policy and consumer uncertainty with a run of mostly positive economic data,” Nela Richardson, the group’s chief economist, said.
Challenger, Gray & Christmas, meanwhile, noted that April job cuts fell sharply from the previous month, but at just over 105,400, they remained some 63% higher than over the same month in 2024 and the highest for the month of April in five years.
“Though the government cuts are front and center, we saw job cuts across sectors last month,” Senior Vice President Andrew Challenger said. “Generally, companies are citing the economy and new technology. Employers are slow to hire and limiting hiring plans as they wait and see what will happen with trade, supply chain, and consumer spending,”
