US adds surprisingly strong 177K jobs in April as labor market holds up in face of tariffs

US employers added 177,000 jobs in April — far above analysts’ expectations in a sign that President Trump’s tariffs have not started to stunt hiring yet.

It’s still a decrease from the month before, when new payroll reports came in at 228,000.

The unemployment rate remained unchanged at 4.2%, as expected, the Bureau of Labor Statistics said on Friday.

Economists surveyed by Bloomberg had expected job growth to slow to 138,000, with businesses pulling back on hiring to cut down on costs while faced with hefty tariffs.

Analysts have cautioned, however, that a broader shift in hiring might not reveal itself in reports for another few weeks or even months, since Trump’s sweeping tariffs did not take effect until early April, and they were much higher than anticipated. 

“Today’s report is a welcome surprise showing a resilient labor market where employers continue to grow their workforce despite prevailing economic uncertainties,” Ger Doyle, US country manager at staffing firm ManpowerGroup, said in a note.

“However, there are still cracks in the foundation that highlight signs of strain in the labor market,” he added, nodding to fewer job openings compared to last year.

Health care, transportation, financial activities and social assistance were among the sectors that continued to add jobs in April.

The report also showed the continued impact of Elon Musk’s DOGE, which has led mass firings and hiring freezes across several agencies, as federal government employment plummeted by 9,000 last month — down 26,000 since January.

Wall Street has been heavily influenced by Trump’s trade war, with major stock indexes suffering sharp swings and shocks amid news of potential trade deals.

Futures tied to the Dow Jones jumped 346 points, or 0.9%, after the job report’s release. S&P 500 and Nasdaq futures rose 0.9% and 0.8%, respectively.

“We’ve already seen how financial markets will react if the administration moves forward with their initial tariff plan, so unless they take a different tack in July when the 90-day pause expires, we will see market action similar to the first week of April,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in a note.

The Federal Reserve is keeping a close eye on April’s payroll report as it extends a “wait-and-see” approach to policymaking, hesitant to cut interest rates suddenly while faced with heightened uncertainty.

The central bankers are largely expected to keep interest rates unchanged, and Friday’s surprisingly strong labor market report will likely reaffirm that decision. 

The odds of rates staying the same at the Fed’s May 7 meeting jumped to 98% on Friday, according to CME FedWatch.

The economy has already shown some signs of weakening, shrinking in the first three months of 2025 as Trump’s tariffs sent companies rushing to import goods from overseas, according to Commerce Department data released earlier this week.

Imports to the US soared a whopping 41.3% in the same period, which sent the nation’s gross domestic product down 0.3% — its steepest fall since the first quarter of 2022. Several major companies have suspended their annual forecasts and warned of potential multibillion-dollar hits from the tariffs, while others, like McDonald’s, attributed slowing sales to a more anxious consumer.