America’s job growth managed to clear a low bar for April. However, many economists and strategists showed restraint from celebrating amid a slowdown in job growth and wages, downward revisions for March and February, and ongoing trade anxiety.
The Labor Department reported Friday that nonfarm payrolls grew by 177,000 in April—ahead of the 133,000 jobs economists expected, but shy of March’s downwardly revised 185,000 jobs created (from 228,000 previously). February’s jobs number was revised lower for a second straight month, too, to 102,000 from 117,000 previously.
Regardless, the number was enough to qualify as America’s 52nd consecutive month of payroll gains.
Unemployment remained at 4.2%, the same as it was in March, and right in line with analysts’ expectations.
The 7 Best Gold ETFs You Can Buy
“Another stronger-than-expected jobs report is encouraging, although definitely not top of mind considering the ongoing uncertainty around tariffs and global trade,” says Joe Gaffoglio, CEO and President at Mutual Of America Capital Management. “March’s 4.2% unemployment rate underscores resilience in the U.S. economy, but cracks have been forming. Job openings continue to decline and steady quit rates suggest workers are growing less confident about jumping to new roles. Given the more cautious stance both by companies and workers, ongoing job market momentum will be closely watched.”
One such crack in Friday’s report was wage growth, which came to just 0.2%, to $36.06. That figure fell beneath expectations for a 0.3% expansion in workers’ pay. Over the past year, average hourly earnings have grown by 3.8%.
Here’s a brief look at the April jobs report’s most pertinent details:
- April payrolls: +177,000 month-over-month (estimate: +133,000)
- April unemployment: 4.2% (estimate: 4.2%)
- April hourly earnings: +0.2% MoM (estimate: +0.3%)
- March payrolls (revised): +185,000 (+228,000 previously)
- February payrolls (revised): +102,000 (+117,000 previously)
Health care was a source of employment strength yet again, adding 51,000 jobs in the month, on par with its 12-month average monthly gain of 52,000. Transportation and warehousing employment was up by 29,000, financial activities was up by 14,000 jobs, and social assistance gained 8,000 jobs.
Federal government employment was expectedly down again, by 9,000, for a total of 26,000 lost jobs since January.
Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested’s free retirement planning newsletter.
Federal Reserve Still Looks Likely to Pause
“Strong jobs data puts a spring in the Fed’s step,” says Lindsay Rosner, head of multi sector fixed income investing at Goldman Sachs Asset Management. “In the here and now, solid labor market data provides the Fed with scope for patience.”
Indeed, the CME FedWatch Tool, which uses Fed funds futures prices to track the probability of a change to the central bank’s benchmark rate, shows a 95% chance that the central bank will keep its current rate policy in place during the next Federal Open Market Committee (FOMC) meeting, set for May 6-7. That’s higher than the roughly 90% chance expected just a week ago.
“With the forward-looking outlook having deteriorated, however, today’s data feels somewhat backward looking,” Rosner says, “and the risks remain that a weakening economy could see the Fed resume its easing cycle later in the year.”
Indeed, many experts’ sights were fixed not on Friday’s report, but toward the future as worries about America’s tariff situation worsen. Among other signs: Last week’s International Monetary Fund (IMF) meeting introduced a new topic—tariffs—after years of keeping its focus fixed on the pandemic and inflation on the pandemic and inflation.
7 Low- and Minimum-Volatility ETFs for Peace of Mind
“Policymakers are closely watching this high level of uncertainty in the market for any clarity on which to adjust their growth outlooks,” says Steve Rick, Chief Economist at TruStage. “While the market has priced in some expectations around trade guidance, a strong jobs report indicates that the forward path remains murky. Looking ahead, we expect lengthy negotiations between the United States and its trade partners like China before final decisions are made, prolonging the uneasiness.”
More Expert Reactions to April’s Jobs Report
Here’s what other strategists, financial managers, and experts had to say about last month’s employment situation:
Steve Wyett, Chief Investment Strategist, BOK Financial
“The mosaic of the job market has been weakening. Data from the JOLTS report, ADP, and weekly jobless claims show a job market that is less robust. This puts the focus on today’s Department of Labor report as the Fed wrestles with expectations of a conflict between their mandates of price stability and full employment.
“On the surface, the report was better than expected on several fronts. However, like many recent data points, there is a sense that the data so far does not show the full impact of tariff policies. As such, we take this report as a sign that our economy is fundamentally sound while acknowledging there will be headwinds going forward. This report all but assures that the Fed will not be willing to ease at their upcoming meeting, but the next move will likely be to lower rates.”
Stagflation: When Inflation Clashes With an Economic Slowdown
Jeff Schulze, Head of Economic and Market Strategy, ClearBridge Investments
“The April jobs report shows that the labor market was on solid footing as trade war tensions became more disruptive early last month. The data for this release was collected during the week following Liberation Day, meaning it would be too soon to expect substantial fallout to emerge just as higher tariffs were being implemented. As a result, investors are likely to look through this positive print, viewing it as a “calm before the storm” with strength being downplayed given the known headwinds that the labor market will be facing in the coming months. The Fed is likely to continue to sit on the sidelines in the near-term in light of this morning’s data, likely needing to see signs that a downturn in the jobs market has actually taken hold before shifting monetary policy.
“However, this data should not be completely dismissed as it reflects a period of elevated uncertainty and known increases to tariffs. Against that backdrop, the April jobs report shows healthy hiring with less wage/inflation pressure, which are a positive combination for risk assets. Ultimately, a Fed that is staying on the sidelines for longer as trade-related headwinds take hold in the coming months adds to a building list of risks facing the markets over the intermediate term.”
Jason Pride, Chief of Investment Strategy and Research at Glenmede
“The April jobs report was quite literally business as usual, as there was little discernible impact from tariffs showing up in the data. With the unemployment rate holding steady at 4.2% and nonfarm payrolls increasing by 177,000, it seems that businesses are mostly staying the course for now when it comes to managing their human resources in the face of considerably tariff uncertainty.
“On the whole, businesses may take a more cautious and deliberate approach to layoffs during this cycle. In the aftermath of the pandemic, some firms realized they may have slashed payrolls too aggressively and later found themselves bidding up wages to fill the same roles they were cutting not too long ago. This is perhaps one of the factors at play now as businesses grapple with an uncertain outlook.”
Scott Helfstein, Head of Investment Strategy, Global X
“Big upside surprise, again, from payrolls. The labor market continues to defy naysayers. This is the first meaningful economic data since the April 2 tariff announcement and reversal. This likely means the Fed stays in a holding pattern, but this should be welcome given new mounting concerns over tariff-driven business pullback.
“Mixed messages abound. Another strong jobs report alongside a decline in GDP driven by a jump in imports to front run tariffs. The challenge at this point is discerning the temporary distortions from tariff and economic policy versus erosion in confidence that could prove more persistent.”
How Gen X Can Upgrade Their Retirement Savings
Lara Castleton, US Head of Portfolio Construction and Strategy, Janus Henderson Investors
“April’s job figures came in at 177,000, surpassing the anticipated 138,000, and defying expectations of economic frailty following a negative Q1 GDP report. However, with the negative GDP largely due to a surge in imports and reduced government spending, this print, which showed a steady 4.2% unemployment rate, indicates potential ongoing discrepancies between hard and soft data.
“Unfortunately for those wanting lower rates, this beat will make it hard to see the Fed pushing cuts up earlier in the year. Fixed income markets are adjusting back to the higher-for-longer narrative. For investors, remaining invested in quality companies and looking for risk-adjusted spreads should be a priority. Only trade resolutions will stabilize markets, staying invested remains the mantra in the meantime.”
Kevin O’Neil, Associate Portfolio Manager & Senior Research Analyst, Brandywine Global
“Although markets had braced for a slowdown in job growth—due to factors like DOGE job cuts, increased immigration reform, and soft economic indicators—private-sector hiring has remained resilient. The stronger-than-expected employment figure gives the administration more breathing room in its trade negotiations, as risk assets are likely to respond favorably. … However, with the unemployment rate holding steady, the Federal Reserve is unlikely to shift its current policy stance in the near term.”
Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.
