Market expectations broadly point to an addition of 62,000 nonfarm payrolls in April, with the unemployment rate holding steady at 4.3%. The month-over-month wage growth rate is anticipated to rebound to 0.3%, which would further solidify expectations that the Federal Reserve will not cut interest rates within the year. Job growth in the United States for April is projected to slow compared to the previous month, primarily due to the fading seasonal boost from warmer weather and the diminishing impact of previously striking healthcare workers returning to their jobs. However, this does not indicate a fundamental shift in the labor market's underlying conditions—the unemployment rate is expected to remain stable at 4.3%.
The closely watched April employment report from the Labor Department, due for release on Friday, is also forecast to show an acceleration in wage growth for the month. This would reinforce financial market expectations that the Fed could maintain its current interest rate level through 2027. Economists note that the impact of the conflict between the U.S. and Iran on the job market is not yet significant enough to be reflected in the data.
Economists and policymakers generally believe the current labor market is in a stalemate characterized by "slow hiring and slow layoffs." This situation stems from uncertainties brought by the Trump administration's trade and immigration policies, as well as indirect economic pressure from recent Middle East conflicts driving up prices for gasoline, diesel, and commodities shipped via the Strait of Hormuz. "The status quo persists—we haven't had enough time for geopolitical conflicts to genuinely alter labor demand, as hiring decisions are typically made months in advance of actual recruitment," said Joe Brusuelas, chief economist at RSM. "The Fed will focus intently on the wage data and, most importantly, the unemployment rate. These figures will further confirm the new market consensus: no rate cuts this year due to labor market weakness."
According to a survey of economists, nonfarm payrolls are expected to increase by 62,000 in April, following a strong rebound of 178,000 in March. Forecasts range from a decline of 15,000 to an increase of 150,000. Since mid-2025, the nonfarm payroll data has exhibited significant volatility, alternating between gains and losses. Economists attribute some of this volatility to the annual adjustment of the "birth-death model" in the government's statistical model, which estimates monthly job changes from business openings and closings. Analysis suggests that large swings in business registrations and deregistrations make it difficult for the Bureau of Labor Statistics to accurately measure job gains from new business formation. Furthermore, weather factors, strikes, federal government layoffs, and significant changes in the labor force due to the Trump administration's crackdown on illegal immigration have all contributed to increased monthly data volatility.
Consequently, economists recommend focusing on the three-month moving average of nonfarm payrolls to better discern the true trend of the labor market. "Smoothing the data from recent months still points to modest positive growth," said Veronica Clark, an economist at Citigroup. "Given the significant change in the scale of immigration inflows, which has led to average monthly job growth this year being substantially lower than in previous years, modest growth in a single month's data is not concerning in itself."
In the first quarter of this year, the U.S. averaged approximately 68,000 new jobs per month. Economists estimate that the U.S. needs to create between 0 and 50,000 jobs per month to keep pace with growth in the working-age population. Because this so-called "breakeven" pace of job growth is now much lower than in previous years, economists expect the unemployment rate will not surge significantly even if job growth slows noticeably.
From an industry perspective, the healthcare and social assistance sector is expected to continue driving job growth in April, reflecting rigid demand from an aging population, although the pace of growth has slowed. "The loss of Affordable Care Act subsidies, restrictions on Medicaid in many states, tariff policies, and the sharp increase in H-1B visa fees for immigrant doctors and nurses are all headwinds," noted Diane Swonk, chief economist at KPMG. "Rural and poor urban hospitals, which rely most heavily on H-1B visas to fill vacancies with doctors and nurses, simply cannot afford the new fee of $100,000 per visa. Many rural hospitals have already closed."
Manufacturing employment is expected to see further gains in April, largely related to businesses placing orders early in anticipation of price increases and supply shortages due to the Middle East conflict. Government employment is projected to continue its decline—having fallen in 9 of the past 12 months—reflecting the White House's intent to reduce the size of the federal government, though some agencies have begun attempts to replenish staff.
Regarding wages, average hourly earnings are forecast to rise 0.3% month-over-month in April, compared to a 0.2% increase in March. This would push the annual wage increase to 3.8% year-over-year, up from 3.5% in March. The robust performance in nominal wages aligns with the overall stable labor market conditions. However, some economists point out that part of the gain stems from a reduction in the average workweek—hours fell from 34.3 to 34.2 in March and are expected to remain flat at 34.2 hours in April. "This suggests, to some extent, that the seemingly strong recent job growth reflects more technical factors than a genuine increase in economic activity and labor demand," said Clark from Citigroup.
Nevertheless, stronger nominal wage gains are being eroded by high inflation—gasoline prices have now surpassed $4.50 per gallon. Therefore, some economists argue that the surface stability of the labor market masks structural fissures within the economy: low-income households are facing increased living pressures and cutting back on spending, while high-income households, buoyed by wealth effects from the stock market, remain the primary drivers of consumption. "Those at the bottom of the income spectrum are feeling the pain and cutting back," said Professor Sung Man Hong, Professor of Finance and Economics at Loyola Marymount University. "If high-income earners start feeling the same way, then the U.S. economy will be in real trouble."
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