The labor market showed surprising signs of resilience in April, revealing an economy that is trudging along in the face of growing uncertainty.
The Bureau of Labor Statistics reported that on Friday employers added 115,000 new jobs in April, around double what economists had predicted, with an average of 48,000 positions added over the past three months. The unemployment rate stood unchanged, at 4.3%.
The report offered a measure of stability for an economy still adjusting to last year’s tariffs and bracing for the effects of rising oil and energy prices from the war with Iran, pressures that have yet to fully filter through the labor market. While hiring has slowed sharply from the rapid gains seen after the pandemic, April’s job growth suggested employers are not yet pulling back in response to mounting economic pressures.
“This report suggests that after being in hibernation the jobs market may be waking up,” said Beth Ann Bovino, chief economist, U.S. Bank.
This report comes at a pivotal time for the Federal Reserve, as they voted to keep interest rates steady last week, despite unusual dissent from four members, as both headline and core inflation continue to sit above their target 2% rate. This month’s numbers indicate the Fed is unlikely to change rates in the near future.
April’s job growth remained concentrated in essential service sectors, while white collar and discretionary industries continued to weaken.
Health care and social assistance continued to dominate job gains in April, contributing to roughly half of the jobs added last month. Transportation, warehousing and retail trade also saw gains, while the information sector and federal government lost a combined 22,000 jobs.
Retail gains were concentrated in warehouse clubs and big box stores, while jobs in department stores and electronics retailers ticked down, suggesting consumers may be concentrating purchases toward essential rather than discretionary items.
Growth in jobs for couriers and messengers led transportation gains, up 38,000, though employment in the sector remains 105,000 below its February 2025 peak.
The information sector, which includes both tech and media, has steadily lost jobs after hitting a post-pandemic peak in November 2022, shedding a net 42,000 positions.
For workers hired during that boom, navigating the slowdown has become increasingly difficult.
Farha Lina made the decision to switch jobs and pursue software engineering while she was stuck at home during the pandemic. She was sold a story of limitless jobs and open opportunity.
She enrolled in coding bootcamp and landed a job at American Express shortly after. Just three years in, she was laid off as part of a restructuring of the company. She says advances in technology and AI have made it hard for her to find another role
“Even with referrals and experience at a recognizable company, getting interviews has been near impossible. The entire process just feels less human and more automated than ever.”
Economists have been divided on whether AI has shaken the tech industry as much as the headlines show.
“Hiring for entry level workers and the broader labor market are both running about 20% below pre pandemic levels, which suggests it’s probably more the broader economy, less AI,” said Kory Kantenga, head of economics, Americas for LinkedIn.
While the data has yet to reflect drastic changes, the narrowing out of growth puts the sector in a difficult position if mass restructuring programs do come. Recent layoffs for major tech companies like Oracle, Meta, and Snap have yet to hit the data, as severance packages and NDAs delay when losses officially register.
What is already visible, though, is mounting uneven pressure on younger workers.
The number of workers employed part time for economic reasons rose by 445,000 in April from the previous month, while the unemployment rate for workers ages 16 to 24 ticked up to 9.5%, suggesting younger workers may be facing a harder time breaking into the workforce.
“The people I am more concerned about are young people trying to enter the labor market, because hires are down,” said Elise Gould, senior economist, Economic Policy Institute.
That’s leading to conditions where young professionals are forced to enter into contracts that offer less room for advancement, leaving them with limited mobility in the labor market.
Elizabeth Beckmon, a biomedical engineer, has felt this firsthand, after graduating into a job market she expected to offer long-term stability. What she was met with, however, was a hiring market offering temporary contract positions, lasting an average of about 12 months, without health care, or other benefits.
After over 200 applications, and eight months of being unemployed, she found a two year contract position in Arizona, forcing her to relocate from her home state of Michigan.
“It wasn’t the perfect fit and I would have preferred a permanent position in an engineering role,” she said. “I will have to be on the job search again in a year when my contract is scheduled to end.”
Though the numbers look positive on the surface, economists say a declining labor force participation rate, and drastic slowdowns in immigration are reshaping what we consider a strong jobs report. As the available labor force slows, the number of jobs needed to keep unemployment steady is beginning to decline.
“Labor force growth is going to continue to soften. The threshold for what is a strong job market and weak is changing,” said Ryan Sweet, chief global economist, Oxford Economics.
What this means for the economy, Sweet said, is that slower labor force growth will leave the U.S. increasingly dependent on productivity gains and continued strength in financial markets to sustain expansion.
Following the report, the S&P index rose by nearly 1% by the end of the day, extending a six-week streak of gains. While wage growth is still managing to outpace inflation, economists worry persistent price increases will soon erode those gains.
That uncertainty now leaves the Federal Reserve in an increasingly difficult position. With Kevin Warsh set to step into his role as Fed chair next week and President Donald Trump continuing to push for rate cuts as soon as June, economists say persistent energy driven inflation could complicate the central bank’s path forward.
“The strength in the labor report gives the Fed latitude to be less concerned about the labor market falling apart, because we’ve had two consecutive months of upward surprises in the data,” said Kenneth Kim, senior economist, KPMG. “The Federal Reserve may need to raise rates sometime this summer to counter the inflationary impulse from rising energy prices.”