Hiring slowed slightly from March’s pace, while the unemployment rate held at 4.2%
By Chao Deng and Justin Lahart
May 2, 2025
The Wall Street Journal
The U.S. labor market steadily added jobs last month despite jolting tariff announcements that many economists expect will give way to a trade policy-induced slowdown later this year.
The Labor Department reported Friday that the U.S. added 177,000 jobs in April, above the gain of 133,000 jobs that economists polled by The Wall Street Journal had expected to see. The unemployment rate, which is based on a separate survey from the jobs figures, held steady at 4.2%.
The report revealed solid data “that no one wants to trust,” said Thomas Simons, chief U.S. economist at investment bank Jefferies. That is because the figures likely reflected staffing decisions made in February and March, before President Trump’s “Liberation Day” tariff announcements early in the month that induced significant market volatility.
Many business leaders are also likely betting that Trump will blink when it comes to some of his proposed policies. The president announced sweeping tariffs on April 2, then paused many of them on April 9. He implied later in the month that he would fire the Federal Reserve chair, then said he had “no intention” of doing so.
Stocks closed higher Friday, with the Dow Jones Industrial Average and the S&P 500 notching nine straight days of gains. Signs of a potential thaw in the trade relations between China and the U.S. also lifted stocks.
Trump, who has said that tariffs will make America richer and bring manufacturing back to the U.S., took a victory lap on his Truth Social platform. “Employment strong, and much more good news, as Billions of Dollars pour in from Tariffs,” he posted. “Just like I said, and we’re only in a TRANSITION STAGE, just getting started!!!”
Still, the fast-changing policies from Washington could soon begin to take the momentum out of the jobs market, economists said.
“There’s a lot of anxiety about what tariffs mean for supply chains,” said James Knightley, an economist at ING Financial Markets. “The longer that this uncertainty lasts for, the more cautious businesses become about hiring and investment.”
The time frame of the jobs survey only captures so much. The Labor Department asks employers how many people they had on their payrolls during any pay period that includes the 12th of the month. That provides a limited look at companies’ early thinking on how to adjust to sudden tariff announcements.
In earnings calls over the past few weeks, companies have complained of the high degree of instability created by tariffs, and some companies are rethinking their entire business strategies. Many, including General Motors and JetBlue Airways, withdrew their earnings guidance for the year.
Relatively few have talked about the need for layoffs. Many appear to be taking a wait-and-see approach when it comes to cutting workers. For some, the reluctance stems from having worked so hard to staff up during and right after the Covid pandemic.
Still, nervous companies could choose to simply put hiring on hold.
What’s more, businesses and individuals are telling surveys that they are worried about the economy. Consumer sentiment in April hit one of its lowest levels on record, according to the University of Michigan.
The pace of April’s job gains was lower than the 185,000 jobs added in March. The gains for February and March were revised down by a combined 58,000 jobs. Hourly wages grew by less than expected compared with both a month ago and a year ago.
Some of April’s job gains may have been driven by the burst of activity that occurred as companies worked to get in front of tariffs, said Pantheon Macroeconomics economist Samuel Tombs. Employment in the transportation and warehousing sector rose by 29,000 jobs last month.
Those gains could get unwound: Data from job-search site Indeed show that a surge in job openings for loading and stocking workers earlier in the year reversed itself by April.
Healthcare, financial activities and social assistance all added jobs in April. Federal-government employment declined by 9,000 jobs, the third month in a row of job losses there.
However, those losses don’t reflect the magnitude of the massive job cuts announced by the Trump administration. Many federal workers are on paid leave or still getting severance pay, and therefore still counted as employed. Ongoing lawsuits and court orders have also slowed those layoffs.