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By Hugh Cameron
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New data shows that the U.S. labor market may be on less shaky footing than Wall Street feared, with hiring coming in stronger than anticipated in April.
According to the latest employment report from the Bureau of Labor Statistics (BLS), the U.S. economy added 115,000 jobs last month, with growth in health care, transportation and warehousing, and retail trade driving the unexpected increase.
This far exceeds consensus forecasts prior to the release—analysts had penciled in a 62,000-job gain—but marks a drop from the 185,000 jobs added in March, which was upwardly revised on Friday.
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March’s originally reported total of 178,000 also comfortably beat forecasts, coming in nearly triple the 60,000 that analysts expected despite concerns that the war in Iran and longer-term headwinds would weigh on employers’ appetite to hire during the month.
Additionally, the report revealed that the U.S. unemployment rate held steady at 4.3 percent in April, in line with expectations. Unemployment was at 4 percent when President Donald Trump returned to office last January, and has been trending up since hitting a post-COVID low of 3.4 percent in April 2023.
Why This Data Matters Now
While not yet undoing the several months of losses that brought employment growth to an effective standstill, the reports have nonetheless brightened the economic outlook in the eyes of many experts.
Certain economists had viewed the cooling labor market as a sign of an imminent downturn, a situation made worse by recent layoff announcements, particularly in the tech sector. And the war in Iran, which has driven up energy prices domestically and worldwide, has been seen as an additional pressure testing the resilience of the labor market and the broader U.S. economy.
What To Know
According to the BLS, gains were again concentrated in a handful of sectors in April.
Health care, viewed as one of the country’s few remaining engines of job creation, added 37,000 roles last month. Transportation and warehousing saw a 30,000 increase in April—though employment is down 105,000 compared to last February’s peak—while retail trade added 22,000 jobs.
Analysts have lauded the better-than-expected data as supporting the idea that the labor market may be in better shape than previously believed, given that employment growth effectively halted toward the end of 2025.
“Today’s report came in above expectations and reinforces a labor market that continues to show resilience at the headline level,” said Ger Doyle, Regional President for North America at ManpowerGroup, in a note shared with Newsweek following the release.
“The next phase for the labor market will depend on whether hiring broadens beyond a narrow range of roles and creates more viable entry points for workers,” he added. “That would be the clearest sign that labor market stability is translating into broader opportunity rather than being confined to a limited group of roles.”
Stephen Moore, a Fox News contributing economist and former Trump campaign adviser, said that the report also helped allay fears that the war in Iran was severely impacting the U.S. economy.
“The buzzword today is ‘resilience,’ because let’s face it, when you have a price of oil that’s $100 a barrel, that’s a tax on the American economy,” Moore said. “And yet, we’re seeing the economy just plough through that, at least right now.”
A report from Goldman Sachs, published in March, estimated that the war was costing the economy over 10,000 jobs each month, with the leisure and hospitality sectors bearing the worst impacts.
But the report still contained some troubling signals.
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“The number of people employed part time for economic reasons increased by 445,000 to 4.9 million in April,” the BLS said. “These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs.”
Employment in the information sector declined by 13,000 in April, with the federal government shedding another 9,000 jobs, for a total decline of 348,000 since October 2024. This is primarily due to the Trump administration’s aggressive efforts to cut government roles through mass layoffs, buyouts and hiring freezes during the early phase of his second term—a process overseen by the now-disbanded Department of Government Efficiency (DOGE).
Daniela Hathorn, senior market analyst at Capital.com, said that while Friday’s report seemed strong “on the surface,” wage growth and U-6 unemployment, including the underemployed and those marginally attached to the workforce, were still cause for concern and signaled “gradual cooling beneath the surface.
And other analysts have cautioned that despite the consecutive, encouraging reports, fallout from the conflict may still damage the country’s economic prospects.
"This morning's labor data is just another sign of continued resilience in the U.S. economy–especially following such a buoyant March report,” Yerbol Orynbayev, former Governor of the World Bank, wrote in a note on Friday. “That being said, while it is a short-term positive indicator, lagging inflationary pressures still risk sending the economy into a tailspin."
What Happens Next
The next BLS employment summary, covering hiring trends in May, is scheduled for release on June 5.
In a press conference following the Federal Reserve’s latest meeting—at which officials left interest rates unchanged—outgoing Chair Jerome Powell said that the significant increase in oil prices caused by the war had contributed to a “highly uncertain” outlook.
"The economic outlook remains highly uncertain, and the conflict in the Middle East has added to this uncertainty. In the near term, higher energy prices will push up overall inflation," Powell said. "Beyond that, the scope and duration of potential effects on the economy remain unclear, as does the future course of the conflict itself."
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