Economy added 115,000 jobs in April despite mixed signals

• Key insight: The U.S. added 115,000 jobs in April while unemployment held steady at 4.3%.
• Supporting data: Newly unemployed workers rose by 358,000 in April to 2.5 million.
• Forward look: The report could complicate an already divided Federal Reserve as it considers whether to combat inflation spurred by geopolitical risks or foster employment by cutting rates.

The economy added 115,000 jobs in April, though the unemployment rate stayed level at 4.3% according to Bureau Labor Statistics data released Friday. 

Job gains primarily came from the health care, transportation and warehousing and retail sectors, while the BLS said the federal workforce continued to shed jobs. The numbers represent a resilient topline figure, though underlying data showed continued signs of cooling in the labor market, including a rise in newly unemployed workers and an increase in people working part time out of necessity.

Health care added 37,000 jobs, transportation and warehousing gained 30,000 and retail added 22,000 personnel. Federal government recruitment fell by 9,000 jobs in April and is down 348,000, or 11.5%, since its peak in October 2024.

Wage growth remained modest, with average hourly earnings rising 0.2% in April and 3.6% over the past year. However, some indicators suggested underlying softness in the labor market. The number of people working part time out of necessity rose by 445,000 to 4.9 million Americans. The number of newly unemployed workers, defined as people who were jobless for less than five weeks, increased sharply by 358,000 people to reach a total of 2.5 million Americans. The rate of labor force participation was effectively unchanged at 61.8%.

Inflation

Fed's Barr says gas prices could 'bleed' into inflation

May 5, 2026 3:48 PM

By Maria Volkova

The numbers will inform the Federal Reserve's decision about whether to adjust rates pursuant to its dual mandate of stable prices and full employment. The labor market has been somewhat mixed in recent months, with Fed officials split over whether to keep rates steady or allow higher interest rates to combat inflation. The April numbers continue the trend of somewhat strong numbers in March, when nonfarm payrolls rose by 178,000 after a February decline, while the unemployment rate was at 4.3%.

The Federal Open Market Committee held rates steady in recent months, with Federal Reserve Chair Jerome Powell saying in March rate cuts would depend on signs of progress toward the Fed's 2% inflation target rate, as war in the Middle East continued to push inflation higher over the short term, but that the longer term outlook was unclear. At the Fed's April meeting, the Federal Open Market Committee held rates level for a third consecutive meeting, though the decision carried an unusually large number of dissents, suggesting growing disagreement over the direction of monetary policy.

As the U.S. war with Iran continues, experts are also worrying that in addition to inflation and effects for monetary policy, a prolonged disruption at the Strait of Hormuz could send negative ripples across the broader economy — including second-order effects on bank balance sheets.

The central geopolitical variable is not Iran itself, but whether disruption to global energy flows becomes prolonged and unpredictable. How much pain banks ultimately feel because of the conflict ultimately hinges on when and whether energy is able to flow out of the Persian Gulf freely, as it did just a few months ago.