The U.S. economy posted stronger-than-expected job gains in April, though growth slowed compared to the prior month amid rising economic uncertainty tied to President Donald Trump’s aggressive tariff measures.
According to data released Friday by the Labor Department’s Bureau of Labor Statistics, nonfarm payrolls increased by 177,000 in April, down from a downwardly revised 185,000 in March. Economists had forecast around 138,000 new jobs.
The unemployment rate held steady at 4.2%, unchanged from March’s figure.
Average hourly earnings rose by 0.2% month-over-month, slightly below the 0.3% increase reported in March.
Despite the easing in job growth, the labor market remains relatively sturdy, with employers continuing to retain workers after the widespread labor shortages seen during and after the COVID-19 pandemic.
Still, concerns are mounting.
Recent data showed that U.S. job openings plunged in March to their lowest level in six months. Private payrolls from ADP fell short of expectations, and weekly jobless claims spiked significantly.
Adding to the caution, the ISM manufacturing survey released Thursday highlighted ongoing factory sector contraction in April, while first-quarter GDP shrank by 0.3%—a downturn few expected at the start of the year.
The Federal Reserve is set to meet next week and is widely expected to leave interest rates unchanged in its upcoming policy decision.
“The solid 177,000 job gain in April, alongside an unchanged unemployment rate, should give the Fed confidence that there’s no urgency to lower rates at next week’s meeting,” Capital Economics analysts noted.
After a 1% rate cut last year, the Fed has kept its benchmark rate at 4.25%-4.5% through 2025. Futures markets are currently pricing in nearly four additional 25-basis-point cuts by year-end, according to LSEG data. However, Trump’s tariff policies remain a wildcard for central bankers as they balance recession risks with concerns that tariffs could re-ignite inflation.
