The April jobs report showed that the U.S. labor market remained strong even after President Trump’s “Liberation Day” retaliatory tariff announcement shook the market.
The U.S. economy added 177,000 nonfarm jobs in April, beating economists’ expectations of 138,000. The unemployment rate remained steady at 4.2%.
Average hourly earnings rose 0.2% from the previous month and 3.8% from the previous year, slightly below expectations of 0.3% and 3.9% increases respectively.
U.S. stock futures traded higher after the report, giving investors some relief that the worst-case economic scenario from Trump’s massive tariff plan may be averted. Data from CME Group showed the Federal Reserve is still unlikely to cut interest rates at its next policy meeting, with the jobs report easing pressure to support the economy.
By sector, Friday’s report showed a sharp increase in hiring in the transportation and warehousing sector, with 29,000 new jobs created, compared with just 2,700 in March.
Federal government employment, which has been a focus since the Trump administration’s DOGE initiative, fell by 9,000. However, total government employment (including state and local) rose by 10,000 last month.
The March jobs report was revised up on Friday to show an actual gain of 185,000 jobs, compared with a previously reported 228,000. Over the past year, the average monthly job gain has been 152,000.
The report is the most important economic data since Trump’s “Liberation Day” tariff announcement on April 2.
On Wednesday, data from the Bureau of Economic Analysis showed that U.S. economic growth contracted for the first time in three years in the first quarter of this year, due to a large surge in imports before the tariffs were implemented.
The tariffs have also weighed on activity in the manufacturing sector and have had a negative impact on various consumer sentiment surveys.
Other labor market readings also reflect a more pronounced negative impact from the announcement or expected implementation of Trump’s tariffs than this monthly jobs data.
On Thursday, Labor Department data showed weekly jobless claims hit a two-month high, while the number of Americans continuing to apply for unemployment insurance hit its highest level since November 2021. Private sector employment data from ADP showed just 62,000 new jobs were created in April, the fewest since July.
