US Payroll Gain of 177,000 Shows Uncertainty Yet to Dent Hiring

“This is a good jobs report all around. The ‘R’ word that the labor market is demonstrating in this report is resilience, certainly not recession,” Olu Sonola, head of US economic research at Fitch Ratings, said in a note. “For now, we should curb our enthusiasm going forward given the backdrop of trade policies that will likely be a drag on the economy.”

US stock futures and Treasury yields rose following the release, while the dollar remained lower.

Federal Reserve officials have indicated they’re in no rush to cut rates until they get further clarity on the impact the administration’s policies will have on the economy, and are widely expected to leave their benchmark unchanged when they next meet May 6-7. While the US central bank is an independent institution, Trump has been pressuring it to ease borrowing costs.

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Payroll gains were broad based, led by an advance in health care. Transportation and warehousing employment rose by the most since December, suggesting a surge in imports and activity boosted demand for labor as businesses rushed to get ahead of tariffs. Manufacturing, meanwhile, shed jobs as the sector saw the steepest contraction in output last month since 2020.

The federal government cut jobs for a third month — the longest such streak since 2022 — reflecting efforts by the Elon Musk-led Department of Government Efficiency to downsize the federal workforce and reduce government spending.

Government Layoffs

The government leads all US industries in terms of layoffs announced so far in 2025, with the vast majority of the about 282,000 cuts being attributed to DOGE actions, outplacement firm Challenger, Gray & Christmas said in a report Thursday. Economists contend at least half a million US jobs could be on the line as federal spending cuts spread to contractors, universities and others who rely on government funding.

The participation rate — the share of the population that is working or looking for work — ticked up to 62.6% in April. The rate for those between the ages of 25 and 54, also known as prime-age workers, rose to the highest level in seven months.

Economists are also paying close attention to how labor supply and demand dynamics are impacting wage gains — especially with inflation risks heating up again. The report showed average hourly earnings rose 0.2% last month, marking a deceleration from March. From a year earlier, they rose 3.8%.

Digging Deeper

• The underemployment rate fell for a second month, to 7.8%
• The average number of weekly hours worked was unchanged
• The median duration of unemployment rose by the most in almost a year
• The unemployment rate for Black women rose to the highest in over three years
• The foreign-born unemployment rate dropped to the lowest level in almost a year

Other data are pointing to a more marke deterioration in labor-market conditions. Job openings fell in March to the lowest level since September, and a report on private hiring showed employers added the fewest payrolls in nine months in April.

Economists largely expect layoffs to pick up in the coming months as economic uncertainty puts a halt on expansion plans. United Parcel Service Inc. expects to cut 20,000 jobs as it anticipates weaker demand for online shopping. Others including Volvo Group and Cleveland-Cliffs Inc. are also moving to shed positions.

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Read more articles by Augusta Saraiva