Key Points:
- U.S. employers added 177,000 jobs in April, down from a downwardly revised 185,000 in March, according to the U.S. Bureau of Labor Statistics. The U.S. unemployment rate was unchanged at 4.2%.
- The share of workers who were long-term unemployed (out of work for 27 weeks or more) rose to 23.5% in April, the highest share in three years.
- Average hourly earnings rose by 3.8% in April from a year earlier.
For another month, the actual data coming from a key US jobs report failed to justify the bad vibes and anxiety that preceded it. Against most expectations, the US labor market stayed strong in April, seemingly immune to mounting uncertainty and tariff-related volatility. But the market can’t escape the consequences of rapidly souring business and consumer confidence forever. The impacts of rapid upheavals in federal employment and whipsaw movements in the stock market over the past few months have generally not yet shown up in official data, but they will at some point. When they do, and the data does start matching the vibes, a recession may become a self-fulfilling prophecy.
Data under the surface paints a mixed picture. The establishment survey of businesses was generally strong. More than half of the industries measured by the Bureau of Labor Statistics added jobs in April, with the strongest gains coming from healthcare, which added 51,000 jobs. Transportation and warehousing added 29,000 jobs in April, more than double its 12-month average, and a possible sign of employers building up inventory in advance of tariffs. The federal government posted a decline of 9,000 jobs in April, and employment in that category is down by 13,000 since mass layoffs began in February.
But the household survey showed more signs of deterioration. The median duration of unemployment continues to rise, and the share of workers who were long-term unemployed (out of work for 27 weeks or more) rose to 23.5% in April, the highest share in three years. Both suggest that it is taking longer for unemployed workers to find new opportunities, and reinforce a growing divide in the market between those out of work and those who are employed. So far in 2025, the market has been marked by a low firing, low hiring trend that can’t last forever — sooner or later, something will have to give.