Select industries drove hiring as wartime uncertainty weighs on the economy.
The U.S. labor market saw moderate growth to end the first quarter of 2026, showing resilience amid mounting uncertainty from the global oil crisis.
Employers added 115,000 jobs in April, with healthcare and logistics accounting for most of the gains. The unemployment rate remained unchanged at 4.3%, according to the Labor Department’s report on Friday. This data exceeded the expectations of economists, who predicted payroll growth of around 60,000 last month.
Two months into the Iran war, U.S. businesses have increasingly felt the impact of broad-based inflation, with a 50% surge in fuel prices driving up shipping and manufacturing costs. While these effects have yet to materialize for most American workers, the “low hire, low fire” labor market faces growing pressure that may further reveal itself in the months ahead.
“We have this delicate balance — not many people are coming in the door, but not many people are going out the door either,” said Kory Katenga, head of economics for the Americas at LinkedIn. “And that allows the economy to keep adding jobs.”
Government and information sector employment trended slightly downward last month, while construction and manufacturing payrolls showed little change. Healthcare and social services — which have driven employment growth for the past several years — accounted for nearly half of the jobs added in April.
The logistics and retail sectors recorded more surprising gains. Transportation and warehousing added 30,000 jobs, and retail trade added 22,000. Some economists expected rising fuel costs to weigh on shipping and manufacturing activity. Yet UPS — which employs over 400,000 in the U.S. alone — maintained its revenue and growth targets this quarter by adding fuel surcharges to its shipments.
The resilience of American consumers to these increased costs is a persistent trend amid inflationary pressures from the Iran war and Trump’s tariff regime. However, economists predict that high fuel prices may pose greater long-term consequences.
“We don’t really have a firm grasp of entirely how resilient the U.S. consumer is, because they’ve been more resilient than we’ve expected in the last two years,” said Katenga. “But the prospect for what energy prices could do this year is sharp.”
Amid wartime uncertainty, the labor market remains a mixed picture for young Americans. Rachel Mannina, 30, is the founder of Remy, a New York-based startup that develops artificial intelligence solutions for the construction industry. After launching her company last year, Mannina now has four employees, and she plans to add two more this summer.
Mannina says that a shortage of engineers in the construction sector and the growing demand for AI data centers has helped fuel the growth of her business.
“There’s a race to build data centers as quickly as possible,” Mannina said. “Our clients are using us as the edge they need to get it done on an accelerated schedule and within their budget.”
For workers in other sectors, the impact of AI has been notably different. A recent Stanford study found that young Americans in AI-exposed occupations experienced a 13% decline in employment from 2022 to 2025.
This sentiment held true for Emma Sorkin, 26, as she sought a career pivot from her administrative role at a New York City private school. After applying to more than 100 positions over the course of a year, Sorkin received an offer last month for an entry-level communications role at a nonprofit organization. Throughout her search, she found it difficult to convince employers of her experience and transferable skills.
“A lot of people are going for entry-level positions and they’re overqualified, which makes things even harder,” Sorkin said. “I knew I was competing with people who had master’s degrees for jobs that only listed one to two years of required experience.”
Sorkin is far from alone in her frustration. Despite consumer resilience to economic uncertainty, Americans remain broadly pessimistic about their job prospects and household income level, according to the Conference Board’s Consumer Confidence Index.
The impact of inflation on consumers is a top priority for the Federal Reserve, which chose to maintain the benchmark interest rate after meeting last week. While lower borrowing costs bode well for business expansion and employment, most economists expect the Fed to hold off on cutting rates as long as inflationary pressures persist.
In the meantime, employers are consistently yet cautiously adding to their payrolls.
“The job market is weathering the initial impact of the Iranian conflict really well,” said Ryan Sweet, chief global economist at Oxford Economics. “But that impact is going to be with us for a couple months, if not the rest of this year.”
