Employers added 115,000 jobs in April, notching a strong gain for the economy as it faces headwinds from soaring fuel prices, tariffs and immigration restrictions.
The unemployment rate held at 4.3 percent, a low level, according to a Labor Department report released Friday morning.
There are some signs that the labor market is beginning to regain its footing. The report blew past economists’ forecast of 67,000 jobs created with gains spread across industries. But the full effects of the Iran war are only beginning to trickle into the economy. If gas prices remain elevated, consumers could pull back spending, pushing up the unemployment rate in future months, economists say.
“We’re starting to see the labor market warming back up a bit, and so that will start to redistribute the balance across other industries, with the big asterisks of how the Iran war and changes in gas prices are going to influence industries,” said Nicole Bachaud, a labor economist at the jobs site ZipRecruiter.
Average job growth over the past three months is at 48,000. That’s a solid pace of hiring that is enough to keep the unemployment rate steady, although it is muted compared with the boom years coming out of the pandemic.
Average hourly wage growth rose slightly in April, up 3.6 percent over the past year to $37.41 an hour. The gap between inflation and wage growth is narrowing — straining households — with gas prices recently hitting above $4.50 a gallon nationally in May. For now, consumer spending remains healthy as some Americans are flush with cash from robust tax returns.
The White House touted the job gains in a post on social: “NEARLY DOUBLE ECONOMISTS’ EXPECTATIONS!”
“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 spokesman Kush Desai wrote in a post on X.
The report did little to change expectations that the Federal Reserve will hold interest rates steady this year. A sturdy labor market gives Fed policymakers more reason to maintain the status quo as they focus on taming inflation.
The three major stock exchanges traded higher Friday, with the S&P 500 up 0.84 percent and the Nasdaq composite index up 1.71 percent by market’s close.
Health care jobscontinued to fuel labor market growth, adding 32,000 jobs in April as demand from aging baby boomers remains persistently high. The strength of the sector has helped mask an otherwise slow labor market that has created persistent challenges for many job-seekers, especially recent high school and college graduates.
Transportation and warehousing also created 30,000 positions in April, although total employment in the sector remains lower than its peak in February 2025. Retail payrolls swelled by 22,000 positions, with strong gains in super centers and warehouse clubs. Social assistance, which includes social services for families and individuals, added 17,000 positions.
The federal government lost 9,000 positions, and it has contracted by 11.5 percent since peaking in October 2024. The information sector, which includes telecommunications and motion picture industries, also lost jobs. Manufacturing, construction and white-collar sectors — including finance, and professional and business services — lost jobs or showed little change from the prior month.
Other datapoints offer reason for optimism. Continuing claims for unemployment benefits fell to the lowest level last week since early 2024, according to a separate Labor Department report released Thursday. A big boost to the pace of hiring in March also suggested that the labor market could be accelerating, after months of stagnation.
But that could change if fuel prices remain elevated, as consumers would be expected to pull back on spending.
“I didn’t expect [elevated 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,” said Joe Brusuelas, chief economist at RSM.
Brusuelas said inflation data to be released next week could begin to show the deepening effects of higher energy prices on the economy and how much wage growth adjusted for inflation has cooled.
A shrinking workforce is also weighing on the labor market. The mass retirement of baby boomers, a contracting youth population, immigration restrictions and other forces also have dampened the supply and flow of labor, leading to weaker job growth this year. In April, the share of American men actively working or looking for a job was at the lowest level on record outside of two months during the height of the pandemic.
“One of the reasons why we see the unemployment rate staying stable is because the baseline pool of workers is falling,” said Bachaud, the ZipRecruiter economist. “At the same time, people who are long-term unemployed are exiting the market entirely. And so we’re really seeing this shift in labor supply that I think will be very telling of the upcoming challenges to the labor market.”
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