US nonfarm payrolls were marginally lower in April but above consensus

US nonfarm payrolls increased by 177K jobs in April, compared to a downwardly revised 185K in March (from initial 228K), and beat forecast for increase by 138K.

April data showed a marginal slowdown in the US labor sector last month, although numbers are satisfactory, as the economy needs to create approximately 100K jobs per month to keep up with growth.

The separate reports showed that unemployment was unchanged at 4.2%, as well as steady annualized average hourly earnings at 3.8% in April, but below 3.9% consensus.

Although April’s labor data were overall solid, economists remain increasingly cautious on high uncertainty over growing threats from escalation of trade war, particularly between two world’s largest economies – US and China.

The global business climate has changed after US President Trump announced sweeping tariffs on most imports to the US, in a so-called ‘Liberation Day’, as many fear about the magnitude of negative impact to the global economy from escalation of trade war.

Trump, however delayed implementation of a huge tariff package for 90 days that left space for negotiation after the businesses were shocked by his decision which also strongly raised prospects of further slowdown and potential recession.

The US labor sector remained quite resilient to the new reality but was aware of strong warning signals about the negative consequences if the situation escalates.

Economists suggest that the labor market needs more time to digest the latest decisions and quick change in Trump’s policies, to show the depth of negative impact, though many businesses have already downgraded forecasts for 2025, with expectations to see the impact of tariffs in coming months.