Economists forecast the April US jobs report to show moderate job gains, reflecting a continued “low-hire, low-fire” dynamic. Overall, analysts say little change is expected, despite the spike in energy prices caused by the Iran war. In addition, the growing adoption of artificial intelligence is not predicted to hamper job growth at this point.
Economists expect to see 70,000 new jobs in April, down from a stronger-than-expected 178,000 in March. The unemployment rate is forecast to remain at 4.3%. A moderate pace of job growth is not anticipated to sway the Federal Reserve’s near-term outlook for interest rates; the central bank is expected to hold rates steady in the coming months.
Overall, economists say the report should provide good news for the economy. “We’ve had an OK but not great labor market over the last year and a half. Recent data would say maybe it’s getting a little bit better,” says Josh Jamner, senior investment strategy analyst at ClearBridge Investments. “That’d be a welcome sign, both for the health of the consumer and the US economy.”
April Jobs Report Forecast HighlightsJob report release date and time: Friday, May 8, at 8:30 a.m. EDTNonfarm payroll employment is forecast to increase by 70,000 in April vs. 178,000 in March, according to FactSet.The unemployment rate is forecast to remain at 4.3%.Average workweek, seasonally adjusted (preliminary), is forecast to remain at 34.2.Hourly earnings, seasonally adjusted (preliminary), are forecast to increase 0.3% month over month vs. 0.2% in March.Education and Healthcare to Drive April Job Growth
While economists forecast a modest, healthy showing for hiring in April, the gains are expected to be concentrated in just a few sectors. That was the story in March, when education and health services gained 91,000 jobs.
“Job growth has been really narrow,” explains José Torres, senior economist at Interactive Brokers. He expects an increase in nonfarm payroll employment north of 100,000. “We have a lot of sectors that haven’t really been expanding … It’s really been all about education and healthcare, so I’m expecting those segments to really make up the lion’s share of the gains.”
Bank of America US economist Shruti Mishra predicts similarly strong job gains of 80,000, concentrated largely in education and healthcare services. “Job gains should remain concentrated in education and healthcare, where AI uptake has been slower and demographics are a tailwind,” she wrote this week. “Warmer weather may support leisure and hospitality, trade, transport & utilities, and construction (which could also benefit from data center demand). However, uncertainty from the Iran war might weigh on hiring in some sectors, including leisure & hospitality, and trade and transport.”
Mishra added that “with [initial unemployment] claims remaining benign and the weekly ADP data inflecting upwards, risks are tilted to the upside.”
The Low-Hire, Low-Fire Job Market Continues
The overarching theme continues to be limited hiring by longer-term standards, but with relatively few layoffs. Clearbridge’s Jamner predicts that April’s data will reflect “low churn” in the labor market. “Initial jobless claims fell to their lowest level since 1969 last week,” he says. “The ratio of job openings to unemployed people is right in the ballpark of one to one … alternative jobs data would say that the labor market improved.”
Jamner thinks it might be too soon to see the full impacts of the “AI job apocalypse” on financial services and technology, or the Iran war’s impacts on retail and hospitality. “Hiring and firing workers is a pretty expensive and time-consuming process, so businesses tend to be a little bit more reactionary than proactive,” he says.
Interactive Brokers’ Torres describes the job market as “very stable.” Unemployment claims for the weekend ended April 25 totaled 189,000—the lowest level in 57 years. “There’s not much to worry about on the labor front at all,” he says. “Corporations aren’t under much pressure to lay off workers.”
Economists predict the stability of the job market should be reflected in an unemployment rate that holds steady near 4.3%. That would be in line with where the rate has been over the past year.
Jobs Data Expected to Reinforce the Fed’s Rate Hold, for Now
Bond futures traders forecast the Fed to keep interest rates steady in their current range of 3.50%-3.75% at its next meeting on June 17, according to the CME FedWatch Tool. That meeting is expected to be the first with Kevin Warsh as chair, replacing Jerome Powell. With already-sticky inflation worsening because of the spike in energy prices stemming from the Iran war, interest rate cuts that had been expected at the start of 2026 are now seen as off the table for the time being.
“If there’s a materially weaker-than-expected report, I think that will start to get the market to resume pricing some cuts—maybe not at the next meeting, because the thing keeping the Fed at bay right now appears to be inflation risk, not labor market weakness,” says Clearbridge’s Jamner. “Signs of downside job creation or weakened deterioration of the labor market could spur the Fed to call it later in the year.”
Bank of America’s Mishra thinks that even with a weak jobs report, until there is more clarity on the outcome of the Iran war, investors could be reluctant to start pricing in interest rate cuts. On the flip side, “An unemployment rate of 4.3% or lower would leave the Fed comfortably on hold in the near term amid rising inflation risks. A strong jobs report would probably cause markets to price in meaningfully more hikes, even though we think hikes are unlikely to materialize.”
Looking further out, markets see the Fed as tilted toward a rate increase by the end of 2026 by a small margin. According to the CME data, the chances of a hike are seen as roughly 17.0%, while a cut is given 12.6% odds.
The debate over the Fed’s next move was active at the April 29 meeting. Though the central bank voted to keep rates unchanged, four members dissented—the most since 1992. In the statement, three of the “nos” opposed including an “easing bias”—a signal that future rate cuts are more likely than hikes.
“To me, that is a sign that they are closely watching the inflation side of the dual mandate. The job market has been solid, but it hasn’t been amazing,” Jamner explains.