Executive Summary
U.S. payrolls rose by 177,000 in April, well ahead of the consensus expectations for 138,000. There were downward revisions to the prior two months, but the six-month average still rose to 193,200, which is above the pre-COVID three-year average of 177,000.
This report shows scant evidence of the tariffs, aside from a downshift in automotive jobs. Hours worked and monthly wage growth remained stable, as did the unemployment rate (at 4.2%), while labor force participation rose. It also showed minimal federal job cuts.
The good news is that the U.S. economy remained resilient in April; however, this report is from a point in time just after the all-out blitz of tariffs were announced. Furthermore, it provides no support to the notion that the Federal Reserve (Fed) needs to lower interest rates immediately. Accordingly, we believe the Fed will stick with its ‘wait & see’ approach in the near term.
