The U.S. economy added 177,000 jobs in April, beating expectations and helping ease recession concerns, even as Trump’s tariffs on major trading partners continue to weigh on import-heavy sectors.
The Bureau of Labor Statistics reported Friday that nonfarm payrolls rose by a seasonally adjusted 177,000 positions last month. While down from March’s upwardly revised figure of 185,000, the April data came in well above market consensus, which had projected a gain of just 133,000.
The unemployment rate held at 4.2% in April, matching market forecasts. A broader gauge of labor underutilization — which counts discouraged job seekers and those working part-time for economic reasons — slipped to 7.8%. Labor force participation ticked up modestly to 62.6%.
Wages posted smaller-than-expected gains. Average hourly earnings rose 0.2% on the month, short of the 0.3% forecast. On a 12-month basis, wage growth cooled to 3.8%, marking its weakest reading since July of last year.
Health care was the biggest contributor to April’s job growth, adding 51,000 positions. Transportation and warehousing followed with 29,000 new jobs, while hiring in financial services and social assistance also picked up. In contrast, federal payrolls shrank by 9,000, driven by cuts tied to a cost-cutting campaign overseen by Elon Musk’s Department of Government Efficiency (DOGE).
Roughly 26,000 federal jobs have been cut since the start of 2025. The manufacturing sector also slipped slightly, down 1,000 jobs on the month.
The positive figures gave President Trump another opportunity to renew his call for interest rate cuts. “Consumers have waited YEARS to see prices fall. IF THERE’S NO INFLATION, THE FED SHOULD CUT RATES!!!” Trump posted on Truth Social Friday morning.
Despite political pressure, analysts expect the central bank to maintain its current stance at its May 6–7 policy meeting, opting to wait for further clarity on the inflationary impact of tariffs. On Wednesday, however, new data from the Commerce Department showed consumer prices rose 2.3% year-over-year in March, down from 2.7% in February — fueling investor bets on a rate cut by July and potentially three or four reductions by year’s end.
In parallel with the upbeat jobs report, the Trump administration is also preparing to submit a sweeping $1.01 trillion federal budget request for national security in fiscal year 2026, according to documents reviewed by Bloomberg. The figure would represent 3.2% of GDP and mark a 13% increase from the $892.3 billion spent in the current fiscal year. That would also cross the symbolic $1 trillion threshold for the first time in U.S. history.
The proposal includes funding for the Golden Dome missile defense system — modeled after Israel’s Iron Dome — along with modernization of the U.S. nuclear triad, new naval assets, and expanded operations at the southern border. It also calls for a 3.8% increase in military pay and new investments in agencies such as the Department of Energy and the FBI.
Still, the plan is expected to face resistance in Congress, where defense spending has long drawn criticism over waste and lack of transparency. Lawmakers on both sides of the aisle have questioned the Pentagon’s ability to account for its growing budget. According to a recent report by the Government Accountability Office, the Pentagon reported roughly $10.8 billion in accounting discrepancies between 2017 and 2024 — a figure the GAO believes is likely understated.
