• US employers added 115,000 jobs in April, below the 65,000 consensus estimate.
  • The unemployment rate held at 4.3%, matching expectations, while two-month payroll revisions subtracted a net 16,000 jobs.
  • The mixed report suggests the labor market is cooling gradually, potentially influencing the Federal Reserve's rate path.

Hiring momentum moderates

The US labor market added fewer jobs than anticipated in April, with nonfarm payrolls rising 115,000 month-over-month against economist forecasts of 65,000, according to the Bureau of Labor Statistics. The unemployment rate remained at 4.3%, in line with expectations, while revisions to prior months reduced the total February-March payroll count by 16,000.

"The slowdown in hiring is consistent with an economy that is normalizing after the post-pandemic surge," said a senior economist at a major research firm. "But the still-low unemployment rate suggests the labor market remains relatively tight."

Implications for Fed policy

The combination of slower payroll growth and steady unemployment may give the Federal Reserve room to hold interest rates higher for longer, as inflation remains above the 2% target. Market participants had been pricing in rate cuts later this year, but Friday's data could delay those expectations. "We need to see a clearer trend of softening before the Fed will be comfortable easing," said a fixed-income strategist at a global bank.

Sector details and wage growth

Average hourly earnings rose 0.2% month-over-month and 3.9% year-over-year, both below recent readings, indicating that wage pressures are gradually easing. Leisure and hospitality added 20,000 jobs, while manufacturing shed 5,000. The labor force participation rate edged down to 62.8% from 62.9%.

Background context

The report comes amid ongoing debate about the trajectory of the economy. Consumer spending has remained resilient, but manufacturing has struggled under elevated interest rates. The payroll revisions, which subtracted 16,000 jobs, underscore that hiring has been less robust than initially reported.

We attempted to contact the White House Council of Economic Advisers for comment but did not immediately receive a response.

Correction: An earlier version of this article incorrectly stated the initial April payroll estimate; it is 115,000, not 175,000. The error has been corrected.