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Economic News

United States: The Labor Market Is Holding Up Well

May 2, 2025
Francis Généreux
Principal Economist

Highlights

  • The Establishment survey shows that there were 177,000 net hires in April, following gains of 185,000 in March (revised from 228,000) and 102,000 in February (revised from 117,000).
  • Average hourly wages slowed slightly, with a monthly gain of 0.2%, after growing 0.3% in March. Its annual variation remained at 3.8%.
  • The unemployment rate stayed at 4.2% in April.

Comments

While concern and uncertainty weigh on markets and confidence, the US economy still had some momentum in April. The gain of 177,000 jobs is higher than the consensus forecast of 138,000 hires. However, it is worth noting that revisions to the results of the previous two months are clearly negative, subtracting 58,000 jobs from the picture published at the beginning of April. That said, even after the revisions, job growth was stronger in April and March (average of 181,000) than in the first two months of 2025 (average of 106,500), but less than in November and December 2024 (average of 292,000).

 

Of the 250 sectors surveyed, 54.6% recorded an increase in the number of workers, slightly above the 54.0% in March. Slight declines were observed in the manufacturing sector (notably automotive manufacturing), retail trade, and the federal government.

 

The stability of the unemployment rate between March and April masks a very strong employment performance according to the household survey. The growth of the labour force was, however, a little stronger, which explains the stability of the unemployment rate. It should be remembered that the household survey is much more volatile than the establishment survey, and monthly movements should be taken with a grain of salt.

 

The labor market was still resilient during the second week of April (the survey period). Will this continue to be the case in May and beyond? That remains to be seen. Weekly initial jobless claims have barely begun to increase over the past two weeks and remain relatively low. However, we sense that the trade war is a major concern for businesses and is undermining consumer confidence; a cocktail that is not very positive for hiring prospects. Job creation is expected to slow in the coming months, and net losses could occur later in the year.

Implications

Once again, the US labor market is showing some resilience. This should prompt the Federal Reserve to stay on the sidelines at its meeting next week. It remains to be seen whether weaknesses in employment and the real economy in general will manifest before the June meeting.

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