The jobs report for April showed surprisingly solid hiring as the unemployment rate held steady. S&P 500 futures moved higher on the data, helped by headlines that China is considering opening trade talks with the U.S.
The data doesn't give the Federal Reserve a reason to cut rates at next week's policy meeting. Yet employers had little opportunity to respond to President Trump's April 2 announcement of reciprocal tariffs before the mid-month Bureau of Labor Statistics employer survey used to calculate monthly job gains.
9:36 a.m. ET
Odds Shift Against June Fed Rate Cut
After the April jobs report showing a resilient U.S. labor market, markets are pricing in 40% odds of a rate cut by the June 18 Fed meeting. That's down from 58% on Thursday.
Meanwhile, the 10-year Treasury yield rose five basis points to 4.28%, as investors reassessed the economic backdrop.
8:55 a.m. ET
Wall Street Reaction To Jobs Report
"With the forward-looking outlook having deteriorated," wrote Lindsay Rosner, head of multi-sector fixed income at Goldman Sachs Asset Management, "today's data feels somewhat backward looking and the risks remain that a weakening economy could see the Fed resume its easing cycle later in the year."
"These numbers show leaders have breathing room to avoid a recession if they're able to resolve trade issues sooner rather than later," wrote David Russell, global head of market strategy at TradeStation. "It's not too late to get deals done."
8:46 a.m. ET
Job Growth, Losses By Key Sectors
Hiring was led by health care and social services firms, which added 58,000 jobs. Construction firms added 11,000, while manufacturers shed 1,000.
Transportation and warehousing added 29,000, but those gains could reverse as tariffs bite.
Retailers cut 1,800 jobs, while leisure and hospitality added 24,000.
Overall government jobs rose by a net 10,000 despite federal government employment declining by 9,000. The number of federal workers has fallen much more than that, but those who took deferred resignations are still counted as being on the payroll.
8:41 a.m. ET
Household Survey Strong
The household survey was even stronger than the employer survey, which is used to derive the monthly payroll gain. Household data showed the ranks of the employed rising by 436,000.
In further welcome news for the Fed, 518,000 people joined the labor force, meaning they're either working or looking for work.
The ranks of the unemployed rose by 82,000, but for a good reason: more job-searchers.
8:39 a.m. ET
S&P 500 Futures Add To Gains
S&P 500 futures rose 0.9% vs. fair value up from a 0.3% gain just before the April jobs report. The 10-year Treasury yield rose slightly to 4.27%.
8:37 a.m. ET
Jobs Report Hits And Misses
Employers added 177,000 payroll jobs in April, including 167,000 in the private sector. That comfortably topped estimates of 130,000 and 125,000, respectively. However, net hiring for February and March was lowered by a combined 58,000, offsetting the stronger headline number for April.
The unemployment rate held at 4.2%, as expected. Average hourly wage growth came in at 3.8%, a touch below 3.9% expectations.
Jobs Report Expectations
Economists expect a 130,000 increase in nonfarm payrolls in April, including 125,000 additional private-sector jobs, according to the Econoday consensus. The unemployment rate is expected to hold at 4.2%, which matches the highest level since October 2021.
Average hourly earnings are expected to rise 0.3%. The 12-month rate of average wage gains is seen edging up to 3.9% from 3.8%.
Delayed Response To Trump Tariffs, DOGE
Workers who received any pay during the week of April 12 are counted in the BLS nonfarm payroll figures. Further, only 27% of employees are paid weekly, notes Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. Those paid biweekly may have had to get axed within days of the April 2 Trump tariffs shocker to weigh on net hiring in the April report.
While a federal hiring freeze is expected to limit government hiring in April's report, including state and local government, federal workers taking the option of a deferred resignation won't be reflected until this fall.
A burst in import and retail activity as companies and customers front-run Trump tariffs is expected to give way to a slowdown as soon as this month.
Fed Rate Cut Odds
Ahead of Friday's jobs report, markets see just 3% odds of a rate cut at the May 7 Fed meeting, according to CME Group's FedWatch tool. Odds of a rate cut at the June 18 meeting stand at 60%.
Markets are currently tilting slightly toward a full percentage point in Fed rate cuts this year, with 61% odds of four quarter-point moves.
S&P 500
S&P 500 futures are up 0.3% in early Friday stock market action. The S&P 500 is looking to extend the rally to a ninth-straight session. The 8.65% advance for the S&P 500 over the past eight trading days is the biggest since November 2020, when news of the Covid vaccine emerged.
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