U.S. employers added 115,000 jobs and the unemployment rate remained at 4.3% in April, the Labor Department reported Friday. The job growth numbers were better than expected and indicate that the labor market is maintaining a modest momentum despite growing headwinds from rising fuel prices and continued uncertainty around President Trump’s tariff policy.
Continuing a trend, healthcare contributed a big chunk of the job growth, as the sector and related social assistance employers added nearly 54,000 jobs. Transportation and warehousing companies added about 30,000 positions, while retail added nearly 22,000 and leisure and hospitality added 14,000.
Not every sector registered gains, especially those affected by the growing use of artificial intelligence. The information sector shed 13,000 jobs, and finance cut 11,000. Manufacturing employment shrank, too, with a decline of 2,000 jobs.
Some groups of workers showed signs of stress. The unemployment rate for Black workers rose to 7.3%, up two-tenths of a percentage point and roughly twice the rate of unemployment for white workers (3.7%). And the U-6 unemployment rate, which includes those working part-time who would prefer to work full-time as well as those who have been too discouraged to actively look for a job, rose to 8.2%, up from 8.0% in March. That’s the highest level since December and more than one percentage point higher than the period leading up to the Covid pandemic.
Taking credit: The White House claimed credit for the solid job numbers. “The April jobs report smashing expectations thanks to robust private-sector growth is yet another sign that the American economy remains on a solid trajectory under President Trump,” White House spokesperson Kush Desai said on social media, adding, “Americans can rest assured that the best is yet to come.”
What the analysts are saying: Most economists say it’s too early to declare that the labor market has recovered from its tariff-driven slowdown last year, but the April report is clearly good news. “We’ll need to see a couple more months of this; it has been volatile,” said Matthew Martin, senior economist at Oxford Economics, per The New York Times. “But if we see sustained growth, obviously that would be a major positive for the economy.”
Economist Olu Sonola of Fitch Ratings said the April jobs report shows impressive signs of resilience. “The labor market is not booming, but it is proving harder to break than many feared,” he said, per the Associated Press.
The “clear upside surprise” is welcome, especially in the current geopolitical context, said Eric Merlis, co-head of global markets at Citizens Bank. “Importantly, the data suggests the hostilities in the Middle East have had little visible impact on the U.S. job market,” Merlis said in a research note, per Politico.
Looking at the longer-term trend, economists at Goldman Sachs estimate that the underlying pace of job growth now stands at about 51,000 per month, close to the level they say is needed to hold the unemployment rate steady.
Risks ahead: There are reasons to believe that there could be more turbulence ahead, especially if the Strait of Hormuz remains closed due to dueling blockades by Iran and the United States, and the price of energy remains elevated. “I didn’t expect [high gas prices] to impact job creation in April, and I don’t expect it to in May, but it will show up in the summer months should the war continue,” RSM Chief Economist Joe Brusuelas told The Washington Post.
Another potential source of friction is the influence of artificial intelligence on employment. According to the outplacement firm Challenger, Gray & Christmas, AI was cited as a factor by businesses in 26% of the layoffs in April, with the largest share occurring in the technology sector, CBS News reports. Those numbers are expected to grow as the use of AI encroaches upon more and more white-collar jobs.
Another looming source of trouble is inflation, which is expected to continue moving higher as soaring energy costs make their way through the economy. Navy Federal Credit Union Chief Economist Heather Long noted that while wage growth has been a solid 3.6% over the last year, inflation is expected to approach 4%. “Inflation is about to eat up wage gains,” she said on social media.