Like a younger brother babysitting his niece or nephew for the first time, yesterday’s jobs report exceeded expectations. US employers added 115,000 jobs in April, roughly doubling analysts’ projections and suggesting that the geopolitical factors eroding consumer confidence haven’t yet hurt the job market.

According to the Labor Department:

  • Job gains were once again driven by the healthcare industry, reflective of an aging US population. Transportation, warehousing, and retail sectors also added the most jobs since 2024.
  • Federal government payrolls declined again, and job cuts also occurred in manufacturing and “information employment,” which roughly accounts for tech fields. (The latter category has shed 11% of jobs since peaking in November 2022, when ChatGPT was released.)
  • The unemployment rate held at 4.3%, as expected.

Combined with even stronger hiring from March, April’s numbers mark the biggest two-month payroll increase since 2024, coming right after the US lost 156,000 jobs in February, reflecting ongoing volatility. While yesterday’s labor dispatch delighted the stock market…

…some warning signs also flashed

Unemployment may be holding steady, but many Americans are still struggling. Last month:

  • Wage growth increased slightly, to 3.6%. That was below expectations and below the 4.2% rate that economists predict all-items inflation will hit this year due to tariffs and the Iran war.
  • A gauge for 1) part-time workers who would prefer full-time employment and 2) job-seekers who gave up on finding work hit its highest rate since December.
  • The percentage of the population that’s working or seeking work hit its lowest level since October 2021.

Meanwhile, vibes are bad: Consumer sentiment fell to another record low this month as surging gas prices—which hit a nearly four-year high this week—compounded cost-of-living anxiety, according to the University of Michigan’s survey.

Looking ahead…we’ll get a better idea of how much overall prices have risen recently when the latest CPI data comes out next week. With the job market appearing strong overall, the Federal Reserve could hinge its next interest rate decision primarily on inflation.—ML