Job creation topped muted expectations though the plodding U.S. labor market sent up several flags for a potential slowdown this year, the Bureau of Labor Statistics reported Friday.
Nonfarm payrolls rose by a seasonally adjusted 115,000 for the month, down from the 185,000 created in an unusually strong March, but better than the 55,000 forecast in the Dow Jones consensus estimate.
The unemployment rate held at 4.3%, further proof that the labor market has reached a point where only modest job creation is needed to keep the jobless level steady, given little growth in the labor force.
Average hourly earnings, another closely watched metric of labor market health, came in lower than expected, increasing 0.2% for the month and 3.6% on an annual basis, compared with respective estimates for 0.3% and 3.8%.
However, the month also saw another drop in the labor force and a decline in tech-related jobs in the low-hire low-fire environment that has prevailed since the early part of 2025.
The report shows the labor market has been “pretty much stable for a year, year and a half,” Austan Goolsbee, president of the Federal Reserve of Chicago, said in a CNBC interview. “I characterize that we’ve been stable without being good. … The unemployment rate has been stable, the hiring rate’s been stable, the layoff rate’s been stable, the vacancy rate has been stable. So, I still think there’s not a lot of evidence that the job market is falling apart.”
Stocks opened slightly positive while Treasury yields were lower.
The report is “evidence of the underlying resilience of this economy and of this labor market, despite all of the slings and arrows of outrageous concerns about the Middle East and unemployment and inflation and the Fed,” said Scott Clemons, chief investment strategist at Brown Brothers Harriman.
“One month does not a new trend establish,” he added. “There’s been a lot of month to month volatility in the jobs market over the past year. I’m not sure that’s completely gone away. We get another two or three months of solid job gains, then I feel a little bit more comfortable.”
Following recent trends, healthcare led with 37,000 new positions, though multiple other sectors also saw gains.
Transportation and warehousing added 30,000, retail rose by 22,000, and social assistance saw a gain of 17,000.
On the downside, information services lost 13,000, part of a continuing trend that has seen the category down 342,000 jobs since November 2022, coinciding with the rise of artificial intelligence. That has equated to a loss of 11% of jobs during the period.
A broader measure that includes discouraged workers and those holding part-time jobs for economic reasons rose to 8.2%, up 0.2 percentage point. The household survey, which the bureau uses to calculate the unemployment rate, showed a decline of 226,000 workers as the participation rate declined to 61.8%, the lowest since October 2021.
The so-called real unemployment rate jumped in large part to a surge in those employed part time for economic reasons, often referred to as unemployed. The level rose by 445,000 to 4.9 million.
Revisions from prior reports were mixed: The March count rose by 7,000 while the February number moved even lower, down by 23,000 to a loss of 156,000. The initial report put the February job loss at 92,000.
“I’m looking through the report trying to find problems, and it’s fairly bulletproof this month,” said Dan North, senior economist for North America at Allianz. “You’d have to say that the numbers overall aren’t impressive. I think that they’re still pointing towards a softening job market, but certainly not a collapse.”
The report comes at a delicate time for the Federal Reserve, which has seen an unusual level of disagreement among officials about monetary policy.
While layoffs have held around their lowest levels in decades, economists increasingly have pointed to slower hiring as the primary source of labor market cooling. The hard data has been strong, but sentiment indicators show tepid hiring plans in both the manufacturing and services sectors.
Last week, the central bank voted 8-4 in favor of keeping its benchmark rate steady, the highest level of “no” votes since 1992. Officials largely agreed over the decision to hold but disagreed over communications about where policy could be headed from here. The dissenters largely expressed the view that the next move could be higher or lower, depending on how conditions unfold.
Policy also has been complicated by the Iran war and tariffs. The Fed is expected to have a new chairman soon as former Governor Kevin Warsh awaits confirmation from the Senate.
Markets expect rates will remain unchanged through the year as the economy battles through stubbornly higher prices and a labor market that, while off the rapid hiring pace of earlier years, has been resilient.
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