American employers added 177,000 jobs in April, which was more than expected, showing the job market is still strong despite President Donald Trump’s trade policies.
Although hiring dipped from a revised 185,000 in March, it was still higher than the 135,000 economists predicted. The unemployment rate stayed at a low 4.2%, according to the Labor Department on Friday.
Trump’s tough and unpredictable actions—like heavy import taxes, have created concern about the economy and raised fears of a possible recession.
However, the latest report shows no clear signs of job market weakness yet. “The labor market refuses to buckle in the face of trade war uncertainty,’’ said Christopher Rupkey, chief economist at fwdbonds. “Politicians can count their lucky stars that companies are holding on to their workers despite the storm clouds forming that could slow the economy further in the second half of the year.’’
Transportation and warehousing companies added 29,000 jobs, which could mean businesses are building up supplies before tariffs raise prices. Healthcare jobs grew by nearly 51,000, restaurants and bars by about 17,000, and construction by 11,000. Meanwhile, factories lost 1,000 jobs.
The Labor Department revised February and March numbers, cutting a total of 58,000 jobs from previous estimates.
Wages rose 0.2% from March and 3.8% compared to a year earlier—approaching the 3.5% growth level linked to the 2% inflation goal set by the Federal Reserve.
The data also showed that 518,000 people joined the labor force, and the percentage of people working or looking for work rose slightly.
“We are not seeing right now any really adverse effects on the employment market,’’ said Brian Bethune, an economist at Boston College, before the report was released.
Employees of Learning Resources, an educational toy company, work at a warehouseStill, many experts are worried the job market could weaken if trade tensions slow economic growth.
Trump’s large import taxes are likely to make goods more expensive for Americans and the businesses that rely on supplies from other countries. These costs may slow the economy. His strict immigration policies could make it harder for industries like hospitality and construction to hire.
The Department of Government Efficiency, run by Elon Musk, is cutting federal jobs and canceling contracts, which could reduce both government and private sector employment.
“Looking ahead, we expect the steep tariff increases and the surge in uncertainty and financial market volatility will result in a more pronounced labor market downshift than previously anticipated,” wrote Lydia Boussour, a senior economist at EY. “Large cuts to the federal workforce and the cancellations of many government contracts will also be a drag on payroll growth in the coming months.’’
She added that fewer immigrants will limit labor supply, which will make job growth harder. “We foresee the unemployment rate rising toward 5% in 2025.’’
Trump’s policies have shaken financial markets and worried consumers. The Conference Board said Tuesday that consumer confidence dropped for the fifth month in a row, hitting its lowest point since the early days of the COVID-19 pandemic.
Despite this, workers may benefit from employers being cautious about laying people off, remembering how hard it was to rehire during the sharp job losses of 2020.
“They laid millions of these people off, and they had a hell of a time getting them back to work,’’ Bethune said. That’s why jobless claims and the unemployment rate remain low compared to past averages.
The federal workforce dropped by 9,000 jobs, in addition to 17,000 lost in February and March. But the full effects of Musk’s government job cuts may not be seen yet. Some orders are being challenged in court, and others who left their jobs were pushed into early retirement, which doesn’t count as unemployment.
With strong hiring and low joblessness, the Federal Reserve is expected to wait and see how tariffs affect the economy before making changes. Chair Jerome Powell has warned that the tariffs could raise prices, which could lead to inflation.
Normally, the Fed responds to inflation by raising interest rates. It’s unlikely to cut rates now unless job losses rise and unemployment worsens. But for now, Friday’s report doesn’t show that happening.
