United States job growth exceeded expectations in April, although several indicators within the closely watched nonfarm payrolls report pointed to a labour market that continues to lose momentum amid broader economic uncertainty.
The Bureau of Labor Statistics (BLS) reported on Friday that nonfarm payrolls increased by a seasonally adjusted 115,000 during the month, above market expectations for 62,000 jobs but below the revised gain of 185,000 recorded in March.
The unemployment rate held steady at 4.3%, reinforcing the view that only modest employment growth is currently required to maintain stable labour market conditions due to limited expansion in the workforce.
Average hourly earnings rose by 0.2% for the month and 3.6% from a year earlier, both below market forecasts of 0.3% monthly growth and 3.8% annual growth, suggesting wage pressures may be easing.
Despite the stronger-than-expected headline figure, the report also highlighted several underlying concerns, including another decline in labour force participation and continued weakness in technology-related employment as businesses maintain a cautious hiring environment.
The labour force participation rate fell to 61.8%, its lowest level since October 2021, while the household survey used to calculate unemployment showed a decline of 226,000 workers.
A broader measure of unemployment that includes discouraged workers and those working part-time for economic reasons increased to 8.2%, up from 8.0% previously.
The number of workers employed part-time for economic reasons rose sharply by 445,000 to 4.9 million, contributing to what economists often describe as the “real” unemployment rate.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said the data reflected a labour market that had remained stable, albeit without significant improvement.
The report shows the labour market has been “pretty much stable for a year, year and a half,” Goolsbee said in a CNBC interview. “I characterise that we’ve been stable without being good. ... The unemployment rate has been stable, the hiring rate’s been stable, the layoff rate’s been stable, the vacancy rate has been stable. So, I still think there’s not a lot of evidence that the job market is falling apart.”
Healthcare once again led payroll growth in April, adding 37,000 jobs, primarily across nursing and residential care facilities as well as home healthcare services.
Transportation and warehousing employment increased by 30,000 jobs, supported by demand for couriers and messengers, although employment in the sector remained down by 105,000 since peaking in February 2025.
Retail trade added 22,000 jobs during the month, while social assistance payrolls rose by 17,000. Leisure and hospitality employment increased by 14,000 positions.
However, federal government employment continued to contract, declining by another 9,000 jobs. Since reaching a peak in October 2024, federal payrolls have fallen by 348,000 positions, representing an 11.5% decline.
The reductions follow the White House’s campaign launched last year to significantly reduce the size of the federal workforce as part of broader government restructuring efforts, although some agencies have recently begun rebuilding staffing levels.
Technology and information services remained among the weakest areas of the labour market. The information services sector lost 13,000 jobs in April and has shed 342,000 positions since November 2022, coinciding with the rapid adoption of artificial intelligence (AI) technologies.
The sector has now lost approximately 11% of its workforce during that period.
Revisions to previous employment reports were mixed. March payrolls were revised higher by 7,000 jobs, while February’s figure was revised down further to a loss of 156,000 jobs from the previously reported decline of 92,000.
The employment report arrives during a period of heightened uncertainty for Federal Reserve policymakers.
Last week, the central bank voted 8-4 to keep benchmark interest rates unchanged, marking the highest number of dissenting votes since 1992.
While officials broadly agreed on maintaining current policy settings, divisions emerged over future guidance, with dissenting members arguing that rates could either rise or fall depending on economic developments.
Monetary policy has also become more complicated amid the ongoing Iran conflict and the impact of tariffs on inflation and growth.
The Federal Reserve is also preparing for leadership changes, with former Governor Kevin Warsh awaiting Senate confirmation to become the next Fed chairman.
