The Jobs Report Came Out. It's Complicated.

On May 8th, the government released the April jobs report. The numbers looked mostly good, with 115,000 jobs added to the US economy in April and the unemployment rate holding steady at 4.3%.

What Even Is a Jobs Report

The Bureau of Labor Statistics conducts a massive survey of employers and households every month in order to report the health of the U.S. job market. The two numbers that are reported most in the media are the change in the number of jobs for the month and the unemployment rate for the month. These two numbers are reported on the day of the release of the jobs report for the given month and are repeated innumerable times on that day.

The Headline

According to the April report, the U.S. economy added 115,000 jobs, as the unemployment rate remained steady at 4.3%. That number came in well above the consensus estimate of 62,000 jobs from economists polled by LSEG, beating expectations by 53,000 jobs, or 85.48%. That is a massive beat. When the economy adds nearly double what Wall Street predicted, it is a sign that the labor market is holding up better than most people thought. For context, March had come in at 178,000, so April represents a step down from the prior month, but clearing a low bar by that much is still something.

Healthcare added the largest number of jobs in the month, growing by 37,000 employees. The sector of transportation and warehousing saw growth as well with 30,000 new jobs, while retail added 22,000 employees. On the other hand, the federal government continued to cut back on hiring, a trend that has persisted since the start of 2025. The information sector was the worst performer in April, shedding 13,000 employees to bring its total decline since the start of November 2022 to 342,000 employees. It is worth noting that the decline in information sector employment has generally tracked with the rapid rise of AI technology that is increasingly replacing human employees in the industry.

Why It's Actually Complicated

Here is where things turn. The labor force participation rate declined in April to 61.8% which is the lowest reading since October 2021. In fact, this is the fifth straight month in which the labor force participation rate has declined. This measure is important because it looks at the share of adults in the labor force who are either working or looking for work. If the labor force participation rate is falling, that means that people are dropping out of the labor force. These individuals are not counted as part of the unemployment rate, which is why the rate has remained stuck at 4.3% even as labor force participation has declined in recent months.

Moreover, the number of individuals working part time for reasons related to inadequate work hours rose by 445,000 in April to 4.9 million. The individuals reported working part time because they prefer working more hours.

The final number that is worth looking at is average hourly earnings for all production and nonsupervisory employees, which rose 3.6% from the same month in the prior year. This number was below expectations, and is important because it shows whether or not the pay for most workers is keeping pace with the inflation that has persisted at a rate above 3% in recent months.

What It Means

The report is another for the Fed to ponder over. A cooling down of the labor market would certainly lead to the lowering of interest rates in order to stimulate the economy. However, inflation is currently at sticky levels and a reduction in interest rates would likely exacerbate the problem. So for now the Fed remains stuck in neutral and is hoping for some better economic data in order to provide some relief to the labor market.

The Bottom Line

115,000 jobs added to the economy is a decent figure and unemployment held steady at 4.3% so all looks good. But as we know that is never the case. More people have fallen out of the workforce, part time workers are up, and in the end average hourly earnings grew just 3.6% over the last year, at a time when we would normally see a boost in wages to counteract rising inflation of 3%+. The report is simply mediocre at best.