After this week’s dour economic news—including that the US GDP shrank in the first quarter and businesses lowered or rescinded their 2025 guidance over tariffs uncertainty—expectations for the newest jobs report were modest.
But better-than-expected job growth in April, as reported by the Bureau of Labor Statistics, defied those expectations, offering businesses some optimism ahead of tariffs’ predicted disruption to the labor market.
“To be honest, this is a report that we need at this time,” Elizabeth Crofoot, a senior economist at Lightcast, told HR Brew. “Whatever’s happening around us, this is going to help keep us centered, I think, as consumers, as businesses, so that we can focus on what’s important to you and your household, what’s important to you in your business, and to try to adapt to the tariffs.”
Diving into the data. Employers added 177,000 jobs in April, slightly below the downwardly-revised 185,000 gains from March, but beating the Dow Jones estimate of 133,000 jobs. The unemployment rate was unchanged, at 4.2%, and has continued to hover between 4% and 4.2% since May 2024. Meanwhile, average hourly earnings rose by six cents to $36.06 from the month prior, and increased 3.8% on average over the past year.
Healthcare added 51,000 jobs in April, the most of any industry, keeping pace with its 12-month average gain of 52,000. Demand for healthcare services has created strong employment growth in the sector, but proposals by the Trump administration and Congress to cut Medicaid and other funding could hamper that growth.
“The fact that those are being called into question are putting some healthcare providers in a little bit of a cautionary stance, saying, ‘Okay, we’ve got aggressive plans, because we know the demand in the market is there,’ but they don’t want to get too far over their skis,” said Adam Stafford, CEO of the recruitment marketing platform Recruitics.
Transportation and warehousing employment rose by 29,000 in April, a sharp increase from the 3,000 jobs added in March. That’s likely because companies were stockpiling inventory, and consumer spending soared, to get ahead of tariffs’ implementation, creating a short-term demand for labor.
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“We still need transportation workers, warehouse workers, because everyone is pulling forward their consumption to get ahead of those tariffs,” Crofoot said. “So we did see that businesses still needed people to basically accommodate that demand.”
Federal government employment declined by 9,000 jobs in April, largely driven by the Trump administration’s cuts to the federal workforce. However, there was some good news as state and local governments—where laid-off federal workers have turned to for job-seeking—added around 19,000 jobs that same month.
Zoom out. It’s likely that tariffs’ impact on the labor market will begin to surface later this year. But absent that clarity, businesses may hesitate before executing on any hiring decisions.
“In the meantime, everyone's kind of on a wait-and-see pause. And the only downside to that is, a pause is not as neutral as you think it is. It’s essentially businesses not investing, not growing,” Crofoot said.
Stafford noted that Recruitics’s customers haven’t abandoned their growth plans for the year, but have changed them somewhat to adapt to that short-term uncertainty. For example, his firm typically sees a hiring spike in March and April, but that has flattened somewhat for that period, though it hasn’t fully diminished.
“What we’re seeing across our client base is that nobody’s abandoned their growth plans for the year,” he said. “Companies aren’t saying, Okay, we’ve got to hit the brakes, and things are falling apart. That’s not what’s happening here.”
Crofoot recommended that HR leaders avoid making talent strategy decisions based on “knee-jerk reactions,” to be patient and think through all of the options available for mitigating tariffs’ impact. Still, she acknowledged that despite the economy remaining strong on paper, workers and consumers are anxious.
“Sometimes you need to make a decision: Are you going to follow the sentiment, or are you going to follow the hard data?” she said. “That’s not an easy choice to make, but at least it gives you some guardrails, to be able to determine: What are your priorities as a business, and as your strategy, and to avoid those knee-jerk reactions.”