NEW YORK, May 8 (Reuters) – U.S. employment increased more than expected in April while the unemployment rate held steady at 4.3%, pointing to labor market resilience and reinforcing expectations that the Federal Reserve would leave interest rates unchanged for some time.
Nonfarm payrolls increased by 115,000 jobs last month after an upwardly revised 185,000 advance in March, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast payrolls rising by 62,000 jobs after a previously reported 178,000 rebound in March.
The report bolstered financial market views that the Fed would leave interest rates unchanged into 2027. The U.S. central bank last week left its benchmark overnight interest rate in the 3.50%-3.75% range, citing inflation worries.
MARKET REACTION:
STOCKS: U.S. stock indexes rose following the report. The Nasdaq composite rose 0.6%, while the S&P 500 and the Dow Jones Industrial Average added 0.5%.
BONDS: U.S. Treasury yields fell. The yields on benchmark U.S. 2-year notes dropped 3 basis points to 3.89% and on 10-year notes fell 4 basis points to 4.35%.
FOREX: The dollar index fell 0.3% to 97.90.
COMMENTS:
ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT:
“I’m not surprised by the market reaction. The number came in better than expected. It indicates that the U.S. economy is doing well. It’s not gangbusters but it’s well.
“You’re seeing the growth in things like manufacturing holding up. The service sector is generally holding up, the employment space is also holding up and showing signs of slight growth. 115,000 new jobs being created is not a tremendous amount, but, it’s enough to at least give the market some confidence that we’re not collapsing and that the earnings we’ve been seeing is not an aberration. It’s being fueled largely by one particular area, but for the most part, that area, artificial intelligence, is helping to create new jobs.”
TIM HOLLAND, CHIEF INVESTMENT OFFICER, ORION ADVISOR SOLUTIONS, OMAHA, NEBRASKA:
“After struggling early in 2026, the U.S. labor market has strung together two much better than expected months of jobs growth, with the April jobs number coming in at 115K vs a Wall Street estimate of 65K.
“On one hand, we think the Trump Administration and incoming Fed Chair Kevin Warsh will welcome the better-than-expected jobs growth – it is another datapoint in support of a resilient U.S. economy that seems to be at little risk of recession. On the other hand, the April jobs data – following on from a much better than expected March jobs report – doesn’t make for a compelling case for Fed rate cuts, particularly with the Consumer Price Index printing at 3.3%. The world’s most important central bank will have much to discuss when it meets for the first time with Mr. Warsh as chair in mid-June.”
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:
“This is a solid labor report, and perhaps it points to the fact that the worries of AI stealing jobs has yet to come to fruition. And it certainly indicates that the labor market remains firm. And the fact that hourly wages came 0.2% is good news in terms of wage inflation.
“This basically suggests that the Fed has to concentrate on inflation and not necessarily on the jobs market.”
STEPHEN KOLANO, CHIEF INVESTMENT OFFICER, INTEGRATED PARTNERS, WENHAM, MASSACHUSETTS:
“The immediate reaction to the labor data out this morning is murky. The biggest positive, I think, is that there was no clear sign of deterioration, but at the same time there is no big positive surprise to indicate an acceleration of stabilization in the labor market.
“While the headline number was better than expected at 115K jobs in April, with the prior month being revised slightly as well, I look at the 3 month average and it sits at just 48K, down from the previous month indicating a declining trend in job creation overall. And placing this morning’s data in the context of this week with layoff announcements coming in higher than expected at 83,387 and the outlook around an acceleration in job creation is pretty murky. Especially with some more headlines in the news of companies beginning more layoffs related to AI efficiency and general cost cutting in the face of rising input costs.”
TODD SCHOENBERGER, CHIEF INVESTMENT OFFICER, CROSSCHECK MANAGEMENT, WASHINGTON, DC:
“The stronger-than-expected headline Nonfarm Payrolls number is an encouraging sign that the U.S. labor market remains more resilient than many anticipated, even as broader economic pressures persist. While average hourly earnings came in softer than expected — which may help ease some inflation concerns — the solid job creation figure suggests employers are still hiring despite elevated labor costs, tariff uncertainty and geopolitical tensions.
“This report reinforces the view that the economy continues to find pockets of strength, particularly as businesses adapt to structural shifts like AI integration and an evolving workforce shaped by baby boomer retirements. While challenges remain, today’s data points to an economy that is proving more durable than skeptics expected.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:
“Two months in a row of job gains during the months where energy price spikes were most acute reveals a latent demand by businesses to grow and hire.”
MOLLY BROOKS, US RATES STRATEGIST, TD SECURITIES, NEW YORK:
“The market reaction was as we expected, a pretty modest in reaction to a higher headline payrolls. We thought going into it that anything more on the dovish side, either an increase to the unemployment rate or a closer to zero or negative payrolls headline number, would probably have a greater reaction.
“The report made it so that the Fed’s mandates are not in tension with each other and we’re going to be continuing to focus on the inflation mandate in the near term, as that’s the one that’s more at risk from being further from target.”
ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK:
“The jobs report came in slightly stronger than expected. That’s very much of a goldilocks type of jobs report because it’s not too hot and not too cold. It’s not too strong where it’s going to trigger more inflation and be a problem for the Fed, but it’s strong enough to allay concerns of stagflation and slower economic growth. Everything comes down to the Fed.
“The market can now check the box for unemployment staying low for the Fed… the unemployment rate held steady. The market can breathe a collective sigh of relief that unemployment is not going higher.”
ALEX SHAHIDI, CO-CIO, EVOKE ADVISORS, LOS ANGELES, CALIFORNIA:
“April’s jobs report came in better than expected, but the more important takeaway is what that level of hiring now represents. Payroll growth of just 115,000 may have raised recession concerns not that long ago, yet today it’s more than enough to keep the unemployment rate steady at 4.3%. That reinforces the view of a labor market that is cooling but still fundamentally stable. For the Fed, this kind of outcome likely argues for continued patience rather than a change in policy direction, particularly with inflation still running above target.”
SAM STOVALL, CHIEF INVESTMENT STRATEGIST AT CFRA RESEARCH, NEW YORK:
“I think it’s good because it confirms that we have a solid labor market that would offer some confidence to consumers so that they can continue their resilient spending patterns, and at the same time, with the unemployment rate at 4.3%, does not sort of force the Fed to reconsider their statement that they are not ready to tighten interest rates. So, it is a good number confirming that the economy in general and the consumer remain healthy.
“The longer that we have elevated oil prices, the greater the risk that it could damage consumer confidence and spending. So right now, it does not appear to be adversely affecting economic growth or consumer confidence, but the longer that it persists, the greater the risk.”
(Reporting by Lucia Mutikani, Chuck Mikolajczak, Karen Brettell, Karen Valetkevich, Laura Matthews, Utkarsh Hathi, Stephen Culp, Sinead Carew, Shashwat Chauhan; editing by Colin Barr)
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