U.S. job growth remained steady in April, with gains concentrated mainly in healthcare, offering a sign of a resilient, but cautious labor market amid the war in Iran.
The Labor Department reported on Friday that employers had added 115,000 jobs last month, exceeding economists’ modest expectations after March’s revised gains of 185,000. Since the beginning of the year, employers have added an average of 76,000 jobs a month. The unemployment rate held at 4.3%, with a reduced work force attributed to the administration’s immigration crackdown and an aging population that is gradually reducing workforce participation.
While a peace deal with the U.S. and Iran remains at a standstill, the full impact of the war has yet to appear in the jobs numbers. Continued high oil prices could weigh on hiring in the months ahead, limiting job growth.
Job gains and a steady unemployment rate appear solid, but the labor market is not showing signs of notable upward momentum. Though layoffs are generally low and corporate profits are healthy, hiring has slowed across a broad range of industries as businesses continue a “low-hire, low-fire” approach.
“We’re generating just enough jobs to keep the employment rate steady,” said Kory Kantenga, head of economics, Americas for LinkedIn. “There’s still some hiring happening, but because hiring is slow, we’re also seeing that not as many people are leaving.”
Steady job gains in April will likely reinforce the Federal Reserve’s focus on inflation risks from the war in Iran, weakening arguments for Federal Reserve officials for interest rate cuts.
Healthcare accounted for a large share of last month’s hiring gains, adding 37,000 roles, continuing consistent strength in the sector not seen in other industries. Other sectors with gains include social assistance by 17,000, retail trade by 22,000 and transportation by 30,000, potentially from higher gas prices driving consumers to order online.
Employment in the information sector fell by 13,000 jobs, while finance lost 11,000. Though both industries have announced high-profile layoffs linked to workplaces efficiencies with artificial intelligence, some pullback is also attributed to overhiring during the post-pandemic years. Federal employment declined by 9000 jobs.
The U.S. economy had absorbed the initial shock of the Iran conflict reasonably well, said Ryan Sweet, chief global economist at Oxford Economics, but rising energy costs could gradually weaken labor demands if consumer spending starts to slow, which could take months to become apparent in the supply chain.
AI is not yet a major driver of overall job losses, especially not broadly across all industries.
Advances in AI could eventually reduce demand for some white-collar positions in the information and financial sectors, said Andrew Zatlin, economist of Southbay Research, while blue-collar labor remains high in demand.
“It’s going to be an ugly summer for recent graduates,” Zatlin said. “You’re going to see it more as the year progresses.”
As an associated director at the San Jose State University’s Career Center, Anita Manuel helps serve over 36,000 students. For the past few months, she has been helping graduating students on their job hunts with resume and cover letter sessions.
She said that students are feeling the stress of the current job market because employers have been cautious in hiring because of economic uncertainty.
“I’ve had students who say they have been ghosted by their employer, applying to 50 or 100 different places and haven’t heard back,” Manuel said. “That’s not unique to any individual student, it’s actually happening across the board.”
While the overall unemployment rate has risen slowly since 2023 to its current rate of 4.3%, for young college graduates the rate increased by a faster rate to 5.3% according to an analysis by the Economic Policy Institute.
The number of individuals working-part time because they could not find full-time work, which is a broader measure of underemployment, has increased to 4.9 million in April from 4.6 million a year ago.
Spencer Tracy, a 23-year-old graduate with a double major in communications and sports management from Xavier University, spent a year seeking full-time sports media jobs while working part-time in outdoor services at a country club in Los Gatos.
When the golf course closed for renovations, his supervisor transitioned him into the communications department to cover a temporary leave. The role does not offer a full-time salary and is not ultimately what he hopes to do long-term, Tracy hopes to learn from the experience.
“Working part-time doing the outdoor services job was frustrating,” Tracy said. “But looking back, I’m 23 and it’s been 11 months since I graduated. I guess I have to take a step back and not expect to have a full time position.”
Kantenga said though the overall unemployment rate is low, it continues to be a difficult time for workers. LinkedIn job search intensity, or applications per applicant, is 32% lower than a year ago. Workforce confidence is much lower than during the COVID-19 pandemic.
“You don’t see as many applications for each applicant simply because there just aren’t as many jobs to apply to,” Kantenga said.
