April Job Gains
The U.S. economy added 115,000 jobs in April, exceeding economists' projections of roughly 67,000 new jobs. The unemployment rate remained steady at 4.3 percent. The U.S. Bureau of Labour Statistics reported that total nonfarm payroll employment edged up.
Sector Growth and Losses
Job gains primarily occurred in the healthcare, transport and warehousing, and retail trade sectors. Healthcare added 37,000 jobs, while transportation and warehousing companies added 30,000. Retailers added 22,000 jobs and construction companies added 9,000 jobs. Manufacturers, however, cut 2,000 jobs in April and have shed 66,000 jobs over the past year.
Economic Context
Average hourly earnings rose 0.2% from March and 3.6% from April 2025, consistent with the Federal Reserve's 2% inflation target. The labor force participation rate dropped to 61.8%, the lowest since October 2021.
Impact of the Iran War
The ongoing war with Iran has caused the biggest disruption of global oil supplies in history, sending average U.S. gasoline prices surging past $4.50 a gallon this week. The conflict has not yet significantly damaged the American job market. After the U.S. and Israel launched attacks on February 28, Iran shut down the Strait of Hormuz.
Federal Reserve Response
The jobs data will likely keep the Federal Reserve on the sidelines, as it holds its key rate unchanged while evaluating the economic impact of the Iran war. Inflation jumped to 3.3% in March. At its most recent meeting last week, three officials voted in favor of changing their post-meeting statement to suggest the Fed's next move could either be a cut or an increase in interest rates.
Analyst Perspectives
Matthew Martin of Oxford Economics says the number of new jobs required each month to keep the unemployment rate from rising is now near zero. Heather Long, chief economist at Navy Federal Credit Union, noted that last month's job gains extended beyond healthcare.
Broader Economic Trends
The economy is getting a boost from big tax refund checks this spring, arising from President Donald Trump's tax cut legislation last year. The refunds allow consumers to spend more freely, giving companies an incentive to add workers in response to rising sales. The job market is showing intermittent signs of recovery after a bleak 2025, where employers created just 9,700 jobs a month.
Despite wage growth of 3.6%, inflation is expected to hit 4%, squeezing Americans financially due to surging gas prices and transportation costs.
