By Elsie Kamsiyochi
The U.S. economy added more jobs than expected in April, offering another sign that the labor market remains resilient despite mounting global and domestic economic pressures.
However, beneath the stronger-than-forecast headline figures, economists say there are growing indications that the labor market may be gradually losing momentum.
According to data released Friday by the U.S. Labor Department, nonfarm payrolls increased by 115,000 jobs in April, significantly outperforming economists’ expectations for a gain of just 62,000 jobs. The unemployment rate remained steady at 4.3%, suggesting that the labor market has not yet experienced a major deterioration even as businesses navigate uncertainty tied to geopolitical tensions, trade disputes, and inflation concerns.
The report initially reassured investors and policymakers who had feared a sharper slowdown in hiring. Financial markets reacted positively, with U.S. stocks opening higher after the release of the data, while expectations grew that the Federal Reserve would likely keep interest rates unchanged in the coming months.
Still, economists cautioned that the report contained several warning signs that point to underlying weakness in the economy.
One of the clearest concerns was the sharp rise in the number of Americans working part-time for economic reasons. That figure jumped by 445,000 in April to 4.9 million people, indicating that many workers may be struggling to secure full-time employment. Household employment also declined during the month, while thousands of people exited the labor force altogether, helping to keep the unemployment rate from rising further.
Analysts noted that these developments suggest businesses are becoming more cautious about hiring and expanding payrolls. Sung Won Sohn, a finance and economics professor at Loyola Marymount University, said the economy is still producing jobs but argued that the broader details of the report reveal a labor market slowly weakening beneath the surface.
Healthcare remained the strongest source of employment growth, adding 37,000 jobs in April, particularly in nursing facilities, residential care, and home healthcare services. Economists said the gains reflect growing demand from the country’s aging population. Transportation and warehousing also posted solid growth, adding 30,000 jobs due to increased demand for couriers and delivery services.
Retail and social assistance sectors also contributed to hiring gains, though other industries struggled. Manufacturing, information services, and financial activities all reported job losses during the month, while federal government employment declined again as the White House continued efforts to reduce the size of the federal workforce.
Government payrolls have now fallen by roughly 348,000 jobs since peaking in late 2024, highlighting the impact of ongoing restructuring efforts across federal agencies.
The labor market has faced heightened uncertainty over the past year due to shifting trade policies, immigration restrictions, and global instability. Economists said it is still too early to fully measure the economic effects of the ongoing conflict involving Iran, though rising energy prices and supply chain concerns are already increasing pressure on businesses and consumers alike.
The Federal Reserve is expected to closely monitor upcoming labor and inflation reports before making any major policy decisions. Last week, the central bank kept interest rates within the 3.50% to 3.75% range, citing persistent inflation risks and uncertainty surrounding the economic outlook.
While April’s stronger-than-expected payroll growth suggests the economy is still expanding, many economists believe the slower pace of hiring and rising dependence on part-time work could signal a more fragile labor market in the months ahead.
Source Reuters
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