Job Creation Remains Surprisingly Strong in April in Key Signal for New Fed Era

The U.S. unemployment rate remained unchanged at 4.3% in April, from the month before, as hiring remained resilient despite a volatile economic backdrop.

The latest report from the Bureau of Labor Statistics released Friday showed that nonfarm payrolls grew by 115,000 jobs last month, far more than the 55,000 to 70,000 that economists had forecasted.

"After months of choppy prints and last year’s worries about deterioration, the labor market is showing signs of stabilizing," says Realtor.com® senior economist Jake Krimmel. "In the months ahead, the labor market needs to crawl before it walks, and walk before it runs."

The strong jobs numbers send a powerful signal to the Federal Reserve as Kevin Warsh prepares to take over as chair. The steady unemployment reading undermines the case for interest rate cuts in the near future, and gives ammunition to hawks at the Fed who argue a rate hike might be on the horizon.

The job market sectors that experienced the biggest gains in hiring in April included healthcare (+37,000), transportation and warehousing (+30,000), and retail trade (+22,000), as federal government employment continued to decline.

Since peaking in October 2024, the federal workforce has contracted by 348,000 jobs, or nearly 11.5%, with an additional 9,000 payrolls cut in April.

Information sector employment contracted by 13,000 jobs in April, led by a 6,000-job decline in motion picture and sound recording and a 3,000-job loss in telecommunications. This continues a sharp downward trend; since its November 2022 peak, the sector has shed a total of 342,000 positions.

There was little change in employment levels over the month in other major industries, including construction, mining, oil and gas extraction, manufacturing, and financial services.

The latest jobs report shows revisions to the previous months: March was revised up by 7,000 payrolls, from +178,000 to +185,000, meaning it was better than initially thought, while February was revised further down by 23,000 jobs, from -133,000 to -156,000.

Together, employment across the two months was 16,000 jobs lower than previously reported.

What this means for the Fed and housing

Krimmel says a better-than-expected jobs report gives a divided Federal Reserve and the incoming chair who will replace Jerome Powell some breathing room to focus on inflation.

"For the Fed and the broader economic outlook, a steadying labor market is genuinely good news," he says. "Policymakers are already dealing with enough fires on the inflation and geopolitical front, with more FOMC members signaling the committee should be open to a hike as their next rate move."

For housing, the April jobs report represents a net positive for a spring market that has shown resilience but remains fragile. New home sales picked up in March and April's inventory data suggests the market is still weathering the macro storm.

Yet, Krimmel points out that resilience to economic shocks does not imply immunity from them. 

Mortgage rates have been heading back up, threatening to claw back affordability gains buyers were counting on this season, and consumer confidence remains in the doldrums.

"Today’s employment report offers a steady foundation of real wages holding, stable unemployment, and strong hiring heading into late spring," says Krimmel. "For buyers, sellers, and builders, that stabilization and positive momentum matters more than any single month of data.

The next question is whether this trend holds and becomes something for consumers and the housing market to build on this summer.