By Augusta Saraiva | Bloomberg
US job growth was robust in April and the unemployment rate held steady despite deep uncertainty over President Donald Trump’s trade policies, which economists expect will dent hiring plans over the coming months.
Nonfarm payrolls increased 177,000 last month after the prior two months’ advances were revised lower, according to Bureau of Labor Statistics data out Friday. The unemployment rate was unchanged at 4.2%.
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The report suggests the labor market continues to cool gradually, a sign that businesses facing heightened uncertainty around tariffs and turmoil in financial markets didn’t significantly alter their hiring plans. Most economists anticipate the brunt of the impact from punishing levies will be seen in coming months.
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US stocks opened higher and Treasury yields rose following the release, while the dollar remained lower. Investors also pared expectations for Federal Reserve interest-rate cuts in 2025.
Fed officials have indicated they’re in no rush to cut rates until they get further clarity on the impact the administration’s policies will have on the economy, and are widely expected to leave their benchmark unchanged when they next meet May 6-7 despite a report Wednesday showing inflation decelerated in March.
While the US central bank is an independent institution, Trump has been pressuring it to ease borrowing costs. He touted the strong employment number in a social media post after the report and repeated his call for rate cuts: “NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!”
Payroll gains were broad based, led by an advance in health care. Transportation and warehousing employment rose by the most since December, suggesting a surge in imports and activity boosted demand for labor as businesses rushed to get ahead of tariffs. Manufacturing, meanwhile, shed jobs as the sector saw the steepest contraction in output last month since 2020.
The federal government cut jobs for a third month — the longest such streak since 2022 — reflecting efforts by the Elon Musk-led Department of Government Efficiency to downsize the federal workforce and reduce government spending.
What Bloomberg Economics Says…
“We think temperate weather, continued rollout of Biden-era stimulus funds, and past Fed rate cuts helped supported April’s labor market. But we don’t think this strength will last. This report comes too early to capture the full employment hit from President Donald Trump’s ‘Liberation Day’ tariffs.”
— Anna Wong, Stuart Paul, Eliza Winger and Estelle Ou, economists
The government leads all US industries in terms of layoffs announced so far in 2025, with the vast majority of the about 282,000 cuts being attributed to DOGE actions, outplacement firm Challenger, Gray & Christmas said in a report Thursday. Economists contend at least half a million US jobs could be on the line as federal spending cuts spread to contractors, universities and others who rely on government funding.
The participation rate — the share of the population that is working or looking for work — ticked up to 62.6% in April. The rate for those between the ages of 25 and 54, known as prime-age workers, rose to the highest level in seven months.
Economists are also paying close attention to how labor supply and demand dynamics are impacting wage gains — especially with inflation risks heating up again. The report showed average hourly earnings rose 0.2% last month, marking a deceleration from March. From a year earlier, they rose 3.8%.
Other data are pointing to a more marked deterioration in labor-market conditions. Job openings fell in March to the lowest level since September, and a report on private hiring showed employers added the fewest payrolls in nine months in April.
Economists largely expect layoffs to pick up in the coming months as economic uncertainty puts a halt on expansion plans. United Parcel Service Inc. expects to cut 20,000 jobs as it anticipates weaker demand for online shopping. Others including Volvo Group and Cleveland-Cliffs Inc. are also moving to shed positions.
“That’s the president’s second jobs day beat in a row,” Stephen Miran, who chairs the president’s Council of Economic Advisers, said on Bloomberg TV. “And the hard data continues to be OK.”
–With assistance from Chris Middleton, Mark Niquette, Nazmul Ahasan, Jonathan Ferro and Annmarie Hordern.
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