April jobs report: Employers added robust 177,000 jobs as Trump's tariffs kicked in

Yahoo

06-05-2025

U.S. hiring remained sturdy in April as the economy added 177,000 jobs despite jitters over President Donald Trump's massive import tariffs and widening federal government layoffs.
But payroll gains for February and March were revised down sharply, at least partly offsetting the big jump last month.
The unemployment rate held steady at 4.2%, the Labor Department said Friday.
Ahead of the report, economists forecast 135,000 job gains, according to a Bloomberg survey.
"The 'R' word that the labor market is demonstrating in this report is resilience, certainly not recession," said Olu Sonola, head of U.S. economic research for Fitch Ratings.
So far this year, monthly job gains are averaging 143,000, down from 168,000 in 2024 but a solid figure in light of heightened uncertainty over the Trump administration's economic policies and stock market turmoil.
What field is hiring the most right now?
Health care, a steady payroll generator the past couple of years, again led the job gains with 51,000. Transportation and warehousing added 29,000 as many companies stepped up imports ahead of tariffs. Leisure and hospitality, which includes restaurants and bars, added 24,000; professional and business services, 17,000; and financial activities, 14,000.
But manufacturing cut 1,000 jobs and retail shed 1,800. Both industries are beset by uncertainty amid tariffs that are likely to squeeze their profits or curtail sales as they pass the costs to consumers.
And federal employment declined by 9,000 in a sign that sweeping cuts by Elon Musk's Department of Government Efficiency (DOGE) are starting to crimp the jobs numbers.
Are wages in the US increasing?
Average hourly earnings rose 6 cents to $36.06, keeping the yearly increase at 3.8%.
Wage growth generally has slowed in recent months and is now consistent with the Federal Reserve's 2% inflation goal, economist Nancy Vanden Houten of Oxford Economics wrote in a research note.
Fed officials 'no longer see wage growth as a source of inflationary pressure,' she said.
Strong growth in productivity, or output per worker, also has allowed companies to give slightly bigger raises without having to raise prices, economists say.
Will the Fed lower interest rates in 2025?
The report is expected to do little to prod the Federal Reserve to cut its key interest rate at a meeting next week, portraying a healthy labor market.
While the tariffs are projected to sap Americans' buying power and have raised the prospect of recession later this year, they're also expected to boost prices.
That would leave the central bank torn between its missions. It raises rates or keeps them higher for longer to battle inflation. It lowers rates to head off – or dig the economy out of – recession.