Where Data Tells the Story
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U.S. employers added 115,000 jobs in April, surpassing analysts’ expectations by roughly 50,000 jobs and pointing towards a labor market that is more solid than the overwhelmingly negative consumer sentimentwould suggest. Friday’s jobs report also showed that the unemployment rate held steady at 4.3 percent, a level that is considered low from a historical perspective.
The positive signs from the labor market make it even more unlikely that the Fed will continue cutting rates anytime soon, especially considering that the Iran war will likely drive up prices, at least in the short term. Markets have already come to terms with this new reality, as the CME Fed Watch tool shows that traders have priced in a very low likelihood for any rate cuts in 2026.
Underneath the positive headline figures, there were some signs of weakness in the latest jobs report as well, though. The number of Americans working part-time for economic reasons, i.e. involuntarily, jumped 450,000 to almost five million and a broader measure of unemployment, which includes these part-time workers as well as those who would like a job, are available to work but haven’t actively looked in the past four weeks, the so-called marginally attached workers, climbed to 8.2 percent – the highest level since December 2025.
Furthermore, job additions were highly concentrated on a few sectors, while many others saw only marginal gains or even small declines. Perhaps most importantly, at least from a consumer perspective, was the fact that wage growth remained relatively low at 3.6 percent in April, meaning that there’s a decent chance that workers’ real wages declined last month, depending on this week’s inflation reading.