The headline masks a labour force shrinking at its fastest pace since COVID
The US economy added 115,000 jobs in April, blowing past forecasts of 55,000–65,000, yet nearly every underlying indicator told a more cautious story, the Bureau of Labor Statistics reported Friday.
Hiring decelerated from March's 185,000 and the three-month moving average sat at just 48,000 — down from 72,000 a year earlier, according to Reuters.
The unemployment rate held at 4.3 percent, but only because 92,000 more people dropped out of the labour force last month, bringing the year-to-date exodus to 1.5m.
Economists told Reuters the jobless rate would have risen to 4.4 percent without that drop.
The split between the government's two surveys was stark.
The establishment survey put total payroll employment at a record 158.7m.
The household survey told the opposite story: overall employment has fallen by 1.37m in 2026, the same outlet reported.
The data will almost certainly keep the US Federal Reserve on the sidelines.
The Fed voted 8-4 last week to hold its benchmark rate in the 3.50–3.75 percent range — the highest dissent count since 1992, according to CNBC — with policymakers split over whether the next move should be higher or lower.
AP News reported that Inflation jumped to 3.3 percent in March, a two-year high, driven by the surge in gasoline prices after the US-Israeli strikes on Iran began February 28 and closed the Strait of Hormuz — through which about a fifth of the world's oil and LNG passes.
The report “actually makes it less likely that we see a rate cut anytime soon,” PNC chief economist Gus Faucher told AP, adding that the Fed can now say: “The job market is solid. Let's get inflation back down to 2 percent.”
BMO Capital Markets chief US economist Scott Anderson told Reuters there is “nothing in this report to move the Fed off the sidelines on future rate cuts.”
The same outlet reported that gasoline prices have surged more than 50 percent since the war began, topping US$4.50 a gallon, and the University of Michigan's consumer sentiment index hit a record low in early May.
Fitch Ratings economist Olu Sonola told AP the labour market was holding up better than many feared.
Faucher cautioned, however, that “the longer conflict in Iran lasts, the higher energy prices go, the greater the drag on the economy.”
Healthcare led all sectors with 37,000 new jobs, extending a streak that has added 456,000 positions over the past year while the rest of the economy combined to cut 205,000.
Transportation and warehousing added 30,000; retail, 22,000.
On the downside, CNBC reported information services lost 13,000 jobs — down 342,000, or 11 percent, since November 2022, coinciding with the rise of AI.
Manufacturers cut 2,000 jobs in April and have shed 66,000 over the past year despite Trump's tariff-driven push to revive factory employment, AP noted.
Reuters said the federal government shed another 9,000 positions, bringing losses to 348,000 — down 11.5 percent — since peaking in October 2024.
Part-time employment for economic reasons jumped by 445,000 to 4.9m, the largest monthly increase in 14 months.
The broader U-6 unemployment measure rose to 8.2 percent from 8.0 percent.
The labour force participation rate fell to 61.8 percent, its lowest since October 2021.
EY-Parthenon senior economist Lydia Boussour told Reuters that slower US population growth, aging demographics, and reduced immigration are keeping US labour supply “structurally tight,” leaving little buffer to absorb slower hiring.
Stocks rose on the data, with the S&P 500 and Nasdaq touching record highs, while Treasury yields fell and the dollar slipped.
The labour market has been “stable without being good,” Chicago Fed president Austan Goolsbee told CNBC, noting it has held roughly steady for a year to a year and a half.
