The U.S. labor market continued to show resilience in April, adding 177,000 jobs and holding the unemployment rate steady at 4.2%, according to the latest data from the Bureau of Labor Statistics. This performance outpaced economists’ forecasts, which had called for a gain of 133,000 to 135,000 jobs, and marked a stronger showing than the average pace of monthly job growth seen over the previous three months.
April’s job gains, while slightly below March’s downwardly revised figure of 185,000, still beat expectations by a considerable margin. The labor market’s ability to generate 177,000 new positions is notable, especially as the economy requires around 100,000 new jobs each month just to keep up with population growth. The unemployment rate, at 4.2%, remained unchanged for the month and has stayed within a narrow range since May 2024.
Healthcare continued to be a major driver of employment, contributing 51,000 new jobs in April, consistent with its recent monthly average. Transportation and warehousing added 29,000 jobs, reflecting a rush by companies to import goods ahead of new tariffs. Leisure and hospitality, professional and business services, and financial activities also posted gains. However, manufacturing and retail faced headwinds, shedding 1,000 and 1,800 jobs respectively, as uncertainty over tariffs and higher costs weighed on these sectors.
Average hourly earnings rose by six cents to $36.06, keeping the annual wage growth rate at 3.8%. This pace of wage increase is now in line with the Federal Reserve’s 2% inflation target, suggesting that while wage growth has moderated, it remains robust enough to support consumer spending.
The April jobs report arrives amid heightened economic uncertainty, largely driven by the U.S.’s aggressive tariff policies. The introduction of sweeping tariffs, including a 145% duty on Chinese imports, has sparked a trade dispute with Beijing and created a more challenging environment for businesses. Many companies accelerated imports in the first quarter to get ahead of the tariffs, a move that has already impacted economic growth and contributed to a contraction in GDP during the first quarter of 2025.
Layoffs have also increased, with major employers like General Motors, Stellantis, and UPS announcing significant job cuts. In the first five months of 2025, layoffs surged by 87% compared to the previous year, with nearly half attributed to government restructuring efforts.
Despite the strong headline job gains, the labor market’s outlook is clouded by ongoing trade tensions and a slowing economy. Some economists predict the unemployment rate could rise to 4.7% by year-end, the highest since September 2021. The broader economic picture remains mixed, with GDP contracting and business confidence shaken by policy uncertainty.
