U.S. employment growth is expected to slow down in April, with the jobless rate remaining steady, reflecting a healthy yet moderating demand for labor. Non-farm payroll growth is predicted to decelerate to 138,000, following a stronger-than-expected surge in March, according to a Bloomberg survey of economists. The unemployment rate is anticipated to remain unchanged at 4.2%. This data will provide the first look at the labor market since the U.S. imposed extensive tariffs, creating a heightened sense of uncertainty for businesses across the country.
The surveys that form the basis of this report were conducted during the second week of April, around the time when President Trump raised tariffs on Chinese goods, further intensifying economic uncertainty. While immigration and trade restrictions are expected to impact payrolls in the future, economists believe that the effects won’t be substantially felt in April, though some caution that the risks remain on the downside. Some experts, such as Shruti Mishra of Bank of America, predict a slightly higher payroll gain of 165,000, while others, like Lydia Boussour of EY, anticipate a more conservative increase of just 65,000.
April’s seasonal factors typically play a significant role in payroll numbers, with industries like leisure and hospitality ramping up hiring for the summer months. However, Boussour suggests that the uncertainty caused by tariffs could lead to weaker-than-expected hiring in these sectors, as well as in retail and transportation. Seasonal adjustments could also overcompensate on the downside, further dampening payroll growth.
Looking ahead, economists foresee a more noticeable slowdown in labor market conditions in May, with significant job losses anticipated in industries like logistics and hospitality. Despite this, the jobless rate is expected to hold steady at 4.2%, largely due to a reduction in immigration since last summer. Fewer workers are entering the labor force, which is helping to maintain the unemployment rate even as demand for labor wanes.
The Federal Reserve is closely monitoring the labor market, especially as tariff-related concerns may drive up prices. While policymakers are likely to keep interest rates unchanged following April’s job report, a weaker May report could push the Fed to focus more on full employment in future meetings.
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