The US economy added 177,000 jobs in April, exceeding forecasts and defying concerns that President Donald Trump’s sweeping new tariffs might already be chilling the labour market. The unemployment rate held steady at 4.2%, in line with expectations, while wage growth decelerated slightly, underscoring a mixed but resilient picture for the economy.
The Bureau of Labor Statistics’ report, released Friday, showed that nonfarm payrolls rose more than the 133,000 jobs forecast by economists, though slightly below the downwardly revised 185,000 added in March. February’s gain was also revised lower, now estimated at 102,000 — 15,000 fewer than previously reported.
Markets reacted positively, with stock futures climbing and Treasury yields rising. The report prompted traders to push back expectations for a Federal Reserve interest rate cut to July, according to CME Group’s FedWatch tool.
Hiring strong despite trade risks
The labour market’s durability comes despite ongoing economic uncertainty sparked by Trump’s “Liberation Day” tariffs — a blanket 10% levy on US imports announced in April, alongside threats of further reciprocal duties. Although a 90-day pause has since been announced to allow for negotiations, fears of a trade war remain.
“This report shows impressive resilience in the face of mounting trade tensions,” said Seema Shah, chief global strategist at Principal Asset Management. “It gives the US a fighting chance to avert a recession — if it can step back from the tariff brink.”
Sector breakdown and wage trends
Health care remained the strongest sector in April, adding 51,000 jobs. Transportation and warehousing gained 29,000, financial activities added 14,000, and social assistance was also a contributor to growth.
Federal government employment, by contrast, declined by 9,000 jobs in April as the Department of Government Efficiency—led by Elon Musk—continued its payroll trimming efforts. Since January, federal jobs have fallen by 26,000. Manufacturing dipped slightly, losing 1,000 jobs in the month.
Average hourly earnings rose just 0.2% in April, below the 0.3% forecast and the lowest monthly increase since November. Annual wage growth cooled to 3.8%, also under expectations. At US$36.06, average hourly earnings are still up meaningfully over the past year, but slowing growth may ease pressure on the Fed.
Labour force expands, underemployment edges lower
The household survey showed a much larger gain, with 436,000 more Americans reporting employment in April. The broader measure of unemployment — which includes discouraged and underemployed workers — ticked down to 7.8%, while labour force participation edged up to 62.6%.
Daniel Zhao, chief economist at Glassdoor, cautioned that this report may not yet reflect the full impact of tariffs. “Even May may still be too early, as businesses work through existing inventories. But today sets the benchmark for measuring the damage ahead.”
Fed in wait-and-see mode
The report lands just ahead of next week’s Federal Reserve policy meeting, where officials are expected to keep rates on hold. Policymakers have signalled a wait-and-see approach amid uncertainty about the inflationary effects of tariffs.
Nonetheless, President Trump urged the Fed to act. “NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!” he wrote on Truth Social, renewing pressure for rate cuts despite the strong employment data.
With headline job growth steady and inflation contained, the April report paints a picture of an economy still growing — but one that may face stronger headwinds in the months to come.
