Employers added 177,000 jobs in April, a solid showing amid tariff uncertainty
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The U.S. labor market slowed in April, with employers adding 177,000 jobs, a solid showing despite ongoing economic uncertainty that’s caused many employers to put hiring plans on hold.
The unemployment rate held steady at 4.2%, near historic lows, according to a jobs report released Friday by the Labor Department. Economists had largely expected growth to cool in April, after an unexpected burst of hiring in March that added jobs to the economy.
The labor market has been a pillar of strength for years, helping prop up the economy through a period of high inflation and elevated interest rates. But now, new signs of weakness – including data this week showing the U.S. economy shrank in the first three months of 2025 – have economists on high alert.
“The economy is losing momentum and it looks like businesses were more cautious about hiring in April as they recalibrated their plans,” said Bill Adams, chief economist at Comerica Bank in Dallas.
Uncertainty over the Trump administration’s tariff plans have led to noticeable shifts in consumers and business behavior. Americans are spending more cautiously, by cutting back on travel and dining out, while many companies are loading up on equipment but pausing hiring and expansion plans.
Gross domestic product, the broadest measure of the economy, contracted by 0.3% in the first quarter of the year, a sudden pullback after almost three years of steady growth. Economists attributed much of that drop to a mismatch in trade, as U.S. businesses stockpiled imports ahead of tariffs, as well as a large decline in federal government spending.
The question now is whether the labor market can withstand rising uncertainty across the economy. The Trump administration’s crackdown on immigration is also likely to ripple through the job market, though economists say it’s unclear exactly where things will land.
Already, there are signs of strain in the job market. The unemployment rate, while still low at 4.2%, has inched up for the past two months. Employers are posting fewer openings, and more Americans report being unemployed for longer. Last week, 241,000 Americans filed new applications for unemployment benefits, an increase of 18,000 from the week before.
Widespread funding cuts and layoffs by the U.S. DOGE Service (the Department of Government Efficiency), which began earlier this year, may also become more evident in April jobs data. Even though federal workers account for a small share of the total workforce, economists say recent layoffs and firings are likely to ripple into other industries across contracting companies and nonprofits.
“Employment tied to industries that receive bulk contracting dollars, such as health care, scientific research, education, transportation, and manufacturing, are most vulnerable,” Seema Shah, chief global strategist at Principal Asset Management, said in an email.
The chill from federal funding freezes has already been far-reaching. Brittany Frodge, a lecturer at Ohio State University, recently found out she’ll be out of a job starting May 15. Her position teaching Spanish will soon go to a graduate student.
“Everywhere I look, there’s a hiring freeze because there’s so much paranoia and uncertainty about the new administration,” she said. “There aren’t as many tenure-track positions and there are severe limits on research.”
Frodge has applied to every opening she’s found that fits her qualifications, she said: a grand total of two, including one in Arkansas. For now, her husband still has a job at Ohio State, teaching in the philosophy department, but she worries about long-term stability.
“It’s a really difficult moment to get work,” she said.