The Bureau of Labor Statistics today reported a gain of 177,000 nonfarm payroll positions for the month of April, surpassing expectations and reflecting strength across several sectors.
This marks the second straight month of better-than-expected job growth, following March’s gain of 228,000 positions.
However, those headline figures don’t tell the full story. While April’s headline figure showed a gain of 177,000 jobs, downward revisions to February and March trimmed a combined 58,000 positions—bringing the net gain closer to 119,000, below the market consensus of 130,000.
As Bruno Valko of RMG noted, total downward revisions so far in 2025 now amount to 124,000 jobs.
The unemployment rate held steady at 4.2%, remaining within a narrow range of 4.0% to 4.2% since May 2024, according to the BLS. The total number of unemployed Americans was little changed at 7.2 million.
The labour force participation rate—reflecting the share of Americans aged 15 and over who are working or actively looking for work—was little changed at 62.6%. The employment-population ratio also held steady at 60.0% in April.
Job gains were led by health care (+51k), transportation and warehousing (+29k), financial activities (+14k), and social assistance (+8k). In contrast, industries like manufacturing, quarrying, oil and gas extraction, and construction saw little to no change.
Federal government employment offset some of the gains, with 9,000 positions lost in April. Since January, federal employment has declined by a total of 26,000.
Another positive indicator was the increase in average hourly earnings for private nonfarm payrolls by 0.2% to $36.06. In the past 12 months, average hourly earnings have climbed a total of 3.8%.
“Across the board, this was a healthy employment report,” wrote TD’s Thomas Feltmate, adding that, “the breadth of hiring across industries remained healthy.”
As a result of the numbers, 10-year U.S. Treasuries surged 5 basis points to 4.29% as of the time of writing. Canada’s 5-year bond yield—which influences fixed mortgage rate pricing—also rose over 4 basis points to 2.74%.
Potential job losses from tariffs could complicate Fed’s path to rate cuts
Though April’s data continue a short string of consensus-beating positives, some economists are warning that the impact of reciprocal tariffs has yet to be realized.
“The employment survey for April was conducted just a few weeks after the reciprocal tariff announcement on April 2, too soon to show a meaningful spike in layoffs,” Feltmate noted.
BMO’s Scott Anderson added that, on the whole, the negative sentiment felt across the country by consumers and businesses has yet to be reflected in the employment data.
“Big picture, the U.S. labour market has not yet capitulated to the negative sentiment building among consumers and businesses, though the full weight of the tariffs shock remains directly ahead of us,” he wrote.
With much uncertainty still to unfold in the coming months, Feltmate says the Fed faces a “tricky position” when it comes to rate cuts, particularly as tariff-driven price increases pose an inflation shock. Even so, he still expects some cuts to arrive this summer.
“Provided inflation expectations remain well anchored, policymakers are likely to look through the inflation shock and deliver a few “insurance cuts” this summer to better support the economy.”
BMO’s Anderson shares that view, reinforcing the outlook by noting that markets are now pricing in a rate cut for July—aligning with BMO’s forecast.
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Last modified: May 2, 2025
