The job market grew at a healthier than expected clip in April, signaling that the full impact of President Donald Trump’s tariffs and other drastic policy measures hasn’t landed just yet.
U.S. employers added 177,000 jobs in April, the Labor Department reported on Friday, on par with the downwardly-revised 185,000 added in March. The gain extended a job growth streak to 52 months. Unemployment remained unchanged at 4.2%. Federal employment, a closely-watched figure in light of the Department of Government Efficiency (DOGE)’s job cuts, dropped.
Both the jobs gain and the unemployment rate signal a solid labor market that has not been significantly rattled by tariffs and uncertainty just yet. The numbers, based on surveys collected in the second week of April, are the first major data release reflecting the aftermath of President Donald Trump’s so-called “Liberation Day” announcement. But it will likely take months for the full effect of tariffs to be felt throughout the labor market, economists say.
“It is going to take a while for the negative impact to hit,” said Christopher Low, chief economist at FHN Financial. “There are enough goods in the system that we should be able to get well into the second quarter before companies find themselves forced to figure out a way to cope with tariffs.”
April’s numbers were buoyed by gains in health care, financial activities and social assistance. They were also propped up by a 29,000-job gain in transportation and warehousing, driven by businesses hurrying to move goods ahead of tariffs. First quarter GDP, which declined at a 0.3% annual rate largely due to a historic surge in imports, pointed toward the same trend.
The report revised March’s gain from 228,000 to 185,000, toning down a perceived surge. The cooler figure is in line with recent growth.
One Trump effect that has started to show up in the data is DOGE’s slashing of government employees. The federal government lost 9,000 jobs last month, for a total reduction of 26,000 since January. The Bureau of Labor Statistics considers employees on paid leave or receiving severance pay to be employed, so the April figure only reflects a portion of DOGE-related federal job losses. More are expected to come once layoffs take hold.
Health and education, industries that have been instrumental to recent job growth, are poised to be especially bruised by the downstream effects of DOGE’s funding cuts and Trump’s budget bill. Damage may be felt in those sectors in coming months.
“We see job growth really being driven by sectors that could be decimated by federal funding cuts,” said Liz Pancotti, policy and advocacy director at the Groundwork Collaborative, a progressive think tank.
While overall unemployment remained steady, the number of people who have been unemployed for more than six months jumped in April. The long-term unemployment figure, which describes people who have gone more than 27 weeks without finding a job, rose by 179,000.
“Anybody who’s lost a job is not feeling so good about getting a new job,” said Diane Swonk, chief economist at KPMG.
One person trying to avoid prolonged unemployment is Chris Patterson, a 59-year-old IT professional who applies to two or three jobs in a typical day. The seasoned worker used to apply to as many as 12 open positions in one day, but he’s been trying to be more strategic as his job hunt, which began in January after a contract position ended, drags on.
“It’s definitely an employer’s world right now,” Patterson, who lives in Greencastle, Indiana, said. “Feedback is non-existent anymore. Ghosting is prevalent. If you get a ‘Dear John’ letter, you count your blessings. At least someone thought enough of you to send you the automated message.”
Landing a job may get even trickier if businesses freeze hiring amid economic uncertainty, which some have already opted to do.
Swannies Golf, a Minnesota-based athletic apparel company with around 80 full-time employees, has grown steadily every year since launching in 2015, according to co-founder Matt Stang. The company’s managers expected the pattern to hold heading into 2025. Then came Trump’s universal 10% tariff.
A week after the levies were announced, Swannies — which relies on clothing imports from Thailand, Taiwan, Vietnam and El Salvador — froze all open positions and future hiring, primarily entry to mid-level positions in operations and sales. So far, sales have remained steady, Stang said, but management didn’t want to take their chances.
“The last couple months have been difficult, and I’m sure everybody would say similarly here, just the uncertainty not allowing you to make business decisions,” Stang said. “It’s just like, let’s wait two or three months and see where things stand.”
The Federal Reserve is also taking a wait-and-see approach to the economy. For months, the Fed has held off on interest rate cuts as it tries to bring inflation down to its 2% target, tuning out persistent demands by the president — from whom the Fed operates independently — to lower rates. April’s solid labor market gave the Fed the green light to hold rates steady at their last meeting meeting.
April’s labor market showed resilience in the face of Trump’s most drastic tariffs, but there have been signs of a weakening economy elsewhere. Consumer confidence plunged to a five-year low in April, nearing pandemic levels. Economists have increased their forecasted inflation and recession risks. In recent days, ports have warned of sharp declines in shipping volumes. Even McDonald’s suffered its worst U.S. sales decline since 2020.
“The elephant in the room is that we still aren’t seeing the full impact from tariffs,” said Daniel Zhao, lead economist at Glassdoor. “Even though today’s report was better than expected, it’s a look in the rearview mirror.”