The US jobs market delivered its second consecutive month of strong performance, with payrolls rising 115,000 in April versus the expected 65,000, according to reports from Investing.com India. This follows last month's initial print of 178,000, which has been revised upward to 185,000. The unemployment rate remained steady at 4.3%, while average hourly earnings increased 0.2% month-over-month and 3.6% year-over-year, though this was below the 0.3%/3.8% consensus predictions. Over the past twelve months, the US has added 238,000 jobs, averaging just under 20,000 per month. However, other key metrics present a mixed picture, with the household survey suggesting employment fell 226,000 while the number of people declaring themselves unemployed rose 134,000. As per CNN, the monthly payroll numbers have been especially volatile through the first part of this year, with factors such as weather, labor strikes and methodological changes contributing to the volatility. When smoothing out this volatility, monthly job gains are running at a three-month average of 48,000, with year-to-date gains at 76,000 jobs per month.
The employment gains were concentrated across specific sectors, with private education and healthcare services adding 37,000 jobs, transportation and warehousing contributing 30,000, and retail employment increasing 22,000, as reported by Investing.com India. However, manufacturing lost 2,000 jobs, information services dropped 13,000 and financial activities declined 11,000. The birth-deaths adjustment made a strong contribution of 391,000 on a non-seasonally adjusted basis, which was similar to last year but much stronger than previous April periods. CNN reports that leisure and hospitality and other services – industries that could be the first to show effects from a broader pullback in consumer spending – added 14,000 jobs and 10,000 jobs, respectively. However, economists caution that half of the job gains came from retail and transportation and warehousing; those are sectors that do not consistently add jobs, as noted by LinkedIn's Kory Kantenga. The tech-heavy information sector lost 13,000 jobs in April, with many job cuts attributed to a greater shift toward investment in artificial intelligence technologies. Yahoo Finance reports that employment in information, meanwhile, slid by 13,000 roles, and is down by 342,000 since its most recent peak in November 2022, with the tech industry alone responsible for 33,361 layoff announcements in April. A total of 65K jobs were added in the cyclically-exposed services sector, which excludes private education, health and government hiring, though this sector is still down 84K from year-ago.
Despite the strong headline employment numbers, economists warn of underlying weakness in the labor market. "We're still creating enough opportunities to keep people generally employed; that said, we still don't see any momentum in the labor market," Kantenga told CNN, describing the situation as "a lack of churn in the labor market, a sort of suspended animation that is not healthy." The labor force participation rate fell for the fifth consecutive month, inching down to 61.8% from 61.9%, while the employment to population ratio fell to 59.1%, which excluding the pandemic, is the lowest rate since 2014. The U-6 unemployment rate rose to 8.2%, the highest in five months and two percentage points above where it was in 2019, according to KPMG's Diane Swonk. She noted that "those who have a job are frozen in place, and those who want a job are frozen out of the labor market." The labor market remains in a "low-hire, low-fire" mode, with hiring decisions taking several months to come to fruition. The jobs report showed a divergence between the household survey and establishment survey, with the household survey showing much weaker conditions than the business survey. The unemployment rate held steady at 4.3% for two consecutive months, but beneath the surface, the number of unemployed new entrants and re-entrants rose (+119K), reflecting a mismatch of skills between those workers and the job openings. The unemployment rate rose slightly for workers aged 20 to 24 (i.e., recent college grads), and the rise in the underemployment rate to 8.2% from 8.0% suggests younger workers with college degrees are settling for jobs that don't require those degrees.
Despite the strong jobs data, consumer confidence remains concerning, with the University of Michigan measure of unemployment fears remaining at highly concerning levels, according to Investing.com India analysis. A separate report Friday showed that consumer sentiment sank to a fresh record low in April, as noted by CNN. The report notes that real household disposable incomes continue to flatline, which is the key driver of spending. This suggests that while employment data appears strong, consumers are not recognizing the strength of the jobs market data. The analysis suggests that companies are going to be wary in an environment of ongoing geopolitical, economic and market uncertainty. The past two months have seen most of the jobs added over the past twelve months, with just three sectors accounting for all the jobs added since December 2022. Consumers' coffers have been buffered by larger tax refunds, wage gains (although slowing), and wealth boosts (particularly for upper-income consumers). However, this could change if earnings are eaten away by inflation. Yahoo Finance reports that a recent NPR/PBS News/Marist Poll survey of 1,322 adults conducted at the end of last month found that 79% of respondents believed AI would be biased toward job losses rather than job gains, a sizable jump from 67% in July of 2025.
The S&P 500 and Nasdaq hit record highs following the solid April jobs report, with a rise in chip stocks contributing to the market gains, as reported by Investing.com India. However, economists caution that the solid-looking topline employment numbers mask underlying weakness. "The headline numbers on the US economy and on the labor market look better than they obviously feel to the overwhelming majority of both consumers and workers," Swonk said. "And there's a reason for that when you look under the hood of the job numbers." The ongoing war in Iran and the ripple effects from sharply higher energy and gas prices serve as causes of concern, with gas prices still hovering nationally at $4.55 a gallon. The April Consumer Price Index is expected to show that the annual rate of inflation accelerated to 3.9% from 3.3% in March, which could exacerbate longstanding affordability concerns. The Fed holds its next policy meeting in June, by which time Kevin Warsh should be in place as the central bank's new chairman. The Personal Consumption Expenditures index rose 3.5% in March on a headline basis, up from 2.8% in February before the war, with core inflation rising 3.2%. Despite the strong headline numbers, a slight uptick in marginally attached workers working part-time for economic reasons and a notable rise in the Aggregate Weekly Hours Index for private sectors (+0.4ppt) signals that some firms are cutting back on hours to reduce costs, though the notable rise in the Aggregate Weekly Hours Index (+0.4ppt) signals that overall labor demand remains strong. A May 7 Challenger, Gray & Christmas report revealed private employers announced 83,387 job cuts in April, up from 60,620 in March, while hiring plans are down 13% compared to the first four months of 2025.
