U.S. Adds 177K Jobs, But 0.2% Wage Gain and 1.7M Long-Term Jobless Raise Concerns

April Jobs Report Shows Slower Growth, Supports Fed Caution

The U.S. economy added 177,000 jobs in April, beating the consensus forecast of 138,000 and offering a modest upside surprise. However, this came alongside a downward revision to March’s figure, now at 185,000 from 228,000.

The unemployment rate held steady at 4.2%, matching expectations, and continuing a flat trend since late last year. Labor force participation (62.6%) and the employment-population ratio (60.0%) were unchanged, reinforcing signs of a labor market running at a slower pace.

Hiring Concentrated in Key Services Sectors

The bulk of hiring was concentrated in healthcare (+51,000), transportation and warehousing (+29,000), and financial activities (+14,000). These sectors outperformed recent trends, with transportation rebounding after a quiet March.

Financial services extended its recovery, while social assistance slowed to +8,000, well below its prior average of +20,000. Federal government employment declined by 9,000, adding to a 26,000 job loss since January. Other major industries, including manufacturing and retail, showed minimal movement.

Wages Miss Forecast as Long-Term Unemployment Rises

Average hourly earnings rose 0.2% in April, missing the 0.3% forecast and decelerating from the prior month’s pace. Year-over-year, wages are up 3.8%.

Earnings for production and nonsupervisory employees increased 0.3%. The average workweek remained unchanged at 34.3 hours, while manufacturing hours edged lower.

Meanwhile, long-term unemployment jumped by 179,000 to 1.7 million, now accounting for 23.5% of all unemployed persons—an indication of emerging slack in labor conditions.

Revisions Weigh on Overall Trend

The combined downward revision of 58,000 jobs for February and March underscores a slower employment trend than previously reported. Coupled with the rise in long-term joblessness and cooling wage gains, these revisions challenge the durability of labor market strength.

The number of discouraged and marginally attached workers was little changed, suggesting limited progress in drawing sidelined labor back into active participation.

Market Forecast: Upside Jobs Surprise Offset by Softer Wage Data

April’s stronger-than-expected headline payrolls figure is tempered by soft wage growth and rising long-term unemployment. While the labor market remains intact, the broader trend points to cooling momentum.

This mixed report is likely to reinforce the Federal Reserve’s patient stance. With inflation concerns easing and labor supply stabilizing, the data supports the case for the Fed to keep rates unchanged as it monitors broader economic conditions.