Dive Brief:

• The U.S. added 115,000 jobs in April, exceeding forecasts as employers powered through turbulence from the highest tariffs since the 1930s and a war-induced surge in fuel prices.
• The unemployment rate held steady at 4.3% as payroll gains last month followed a robust 185,000 surge in March, the Bureau of Labor Statistics said Friday. Employment rose across several sectors, from retail and warehousing to healthcare and transportation, the BLS said.
• After months of concern over weakness, “there’s not a lot of evidence that the job market is falling apart,” Chicago Fed President Austan Goolsbee said. For 18 months “we’ve been stable without being good,” he said on CNBC, adding “we’re in a low-hire, low-fire environment.”

Dive Insight:

Some companies during the past year have adjusted to lower taxation, reduced immigration, higher import duties and other shifts that often prompt a revision to payrolls.

“Many businesses are catching up on hiring and investment decisions delayed last year due to tariff uncertainty,” Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, said.

Some businesses are now redrawing their workforce plans based on a sudden surge in fuel prices triggered by the Iran war and the prospect that artificial intelligence may spur productivity.

Overall, the job market “is inching out of low-hire, low-fire mode into a moderate-hire, low-fire mode” propelled by tailwinds from tax cuts, higher federal spending and interest rate reductions by the Federal Reserve in 2025, Adams said in a note.

With the job market showing signs of stability, the Fed needs to turn its attention to curbing inflation, which has exceeded the central bank’s 2% target for five years, Goolsbee said.

“Inflation hasn’t been great, and it’s been going the wrong way lately,” Goolsbee said, adding that price pressures were too high even before the surge in oil prices following attacks by U.S. and Israeli warplanes beginning on Feb. 28.

Futures for Brent crude oil, the global benchmark, have rocketed by about 44% since the Feb. 28 start of the war, from $70 per barrel to $101 per barrel.

Inflation in services is especially vexing, Goolsbee said.

“That’s not coming from tariffs, that's not coming from oil prices — for several months in a row now it’s been higher than is comfortable and going the wrong way,” he said.

“We’ve got to just keep an eye on this because if everybody starts presuming that inflation rates are going back to something like what they were a few years ago, we would be in a bit of a pickle as a central bank,” he said.

After predicting at least one trim to borrowing costs this year, traders in interest rate futures now see 89% odds that policymakers this year will either hold the federal funds rate at its current level or increase it by at least 0.25 percentage point, according to the CME Group’s FedWatch tool.

The Fed in its first three meetings of 2026 has held the benchmark rate at a range between 3.5% and 3.75%.

At the central bank’s April 28-29 meeting, three policymakers favored keeping the federal funds rate steady but dissented against a continued bias toward reducing the main rate.

Since then, at least three other Fed officials have signalled that they favor a neutral policy statement that does not prioritize curbing inflation or reducing unemployment. Congress has mandated the Fed to ensure maximum employment and price stability.