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Here’s what to expect from the April jobs report on Friday

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A jobseeker takes a flyer at a job fair at Brunswick Community College in Bolivia, North Carolina, on April 11, 2024.

Allison Joyce | Bloomberg | Getty Images

Hiring likely continued at a brisk pace in April as investors look for any cracks in the labor market that could sway the Federal Reserve.

Nonfarm payrolls are expected to show a gain of 240,000 for the month, according to the Dow Jones consensus that also sees the unemployment rate holding steady at 3.8%.

If that top-line number is accurate, it actually would reflect a small step back from the average 276,000 jobs a month created so far in 2024. In addition, such growth could add to the Fed’s reluctance to lower interest rates, with the labor market humming along and inflation still above the central bank’s 2% target.

“There are definitely still tailwinds left,” said Amy Glaser, senior vice president of business operations at job staffing site Adecco. “For April, the name of the game is steady-Eddie as resiliency continues, and then we’re looking forward to some of the seasonal trends we would expect going into the summer.”

April’s jobs market featured more strength in health care and leisure and hospitality, Glaser added. Those have been two of the major sectors for employment growth this year, with health care adding about 240,000 jobs so far and leisure and hospitality contributing 89,000 jobs.

However, growth in the coming months could spread to areas such as education, manufacturing and warehousing, part of the usual seasonal trends as educators look for alternative employment in the summer and students head out seeking jobs, she said.

“I don’t expect to see major surprises this month based on what I’m seeing on the ground,” Glaser said. “But we’ve been surprised before.”

Beating expectations

Indeed, the labor market has been full of surprises this year, topping Wall Street estimates at a time when many economists expected hiring to have slowed down. The 303,000 gain in March shattered forecasts and were part of a glut of data showing that the labor economy remains strong, wages continue to rise and inflation has not moved much after receding sharply in 2023.

That has pushed the Fed into a box as officials are reluctant to start cutting interest rates until they get more convincing evidence that inflation is under control.

Policymakers will be watching several pieces in tomorrow’s report for evidence that job growth is not helping fuel price pressures.

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If the payrolls growth misses expectations by a little and wage pressures diminish while more people enter the labor force, that would be an ideal scenario for the Fed, said Drew Matus, chief market strategist at MetLife Investment Management.

“The Goldilocks scenario is an unemployment rate rise with a participation rate rise,” Matus said. “What that’s suggesting is there’s a little bit of weakness that should translate into less wage pressure and take some of the concerns about sustained sticky high levels of inflation off the table.”

Investors on the lookout

Markets also will be watching the wage numbers closely.

Consensus estimates put average hourly earnings growth at 0.3% on the month, near the March move, and the yearly increase at 4%, or just below the 4.1% the month before. However, Matus said the wage numbers could be distorted by immigration patterns as well as California’s minimum wage increase this year to $16 an hour.

Fed Chair Jerome Powell said Wednesday that wage pressures have eased over the past year as the labor market has moved into better balance between supply and demand.

“Inflation has eased substantially over the past year, while the labor market has remained strong, and that’s very good news,” he said at his news conference after the central bank’s latest meeting. “But inflation is still too high.”

Markets have been in a state of flux as uncertainty over the Fed’s rate path has grown, though Wall Street was in rally mode Thursday, the day before the Bureau of Labor Statistics report drops at 8:30 a.m. ET.

“What you’re seeing in markets reflects the uncertainty around the path forward. What’s going to be more important to the Fed, unemployment or inflation?” Matus said. “If unemployment starts moving higher, is the Fed going to care as much about inflation as they do today? Or vice versa? And I don’t think even with all the information the Fed’s given us, that we know. I don’t think anyone knows and I think that’s why you’re seeing the market behave the way it is.”

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Inflation rate slipped to 2.1% in April, lower than expected, Fed’s preferred gauge shows

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Inflation rate slipped to 2.1% in April, lower than expected, Fed’s preferred gauge shows

Inflation barely budged in April as tariffs President Donald Trump implemented in the early part of the month had yet to show up in consumer prices, the Commerce Department reported Friday.

The personal consumption expenditures price index, the Federal Reserve’s key inflation measure, increased just 0.1% for the month, putting the annual inflation rate at 2.1%. The monthly reading was in line with the Dow Jones consensus forecast while the annual level was 0.1 percentage point lower.

Excluding food and energy, the core reading that tends to get even greater focus from Fed policymakers showed readings of 0.1% and 2.5%, against respective estimates of 0.1% and 2.6%.

Consumer spending, though, slowed sharply for the month, posting just a 0.2% increase, in line with the consensus but slower than the 0.7% rate in March. A more cautious consumer mood also was reflected in the personal savings rate, which jumped to 4.9%, up from 0.6 percentage point in March to the highest level in nearly a year.

Personal income surged 0.8%, a slight increase from the prior month but well ahead of the forecast for 0.3%.

Markets showed little reaction to the news, with stock futures continuing to point lower and Treasury yields mixed.

People shop at a grocery store in Brooklyn on May 13, 2025 in New York City.

Spencer Platt | Getty Images

Trump has been pushing the Fed to lower its key interest rate as inflation has continued to gravitate back to the central bank’s 2% target. However, policymakers have been hesitant to move as they await the longer-term impacts of the president’s trade policy.

On Thursday, Trump and Fed Chair Jerome Powell held their first face-to-face meeting since the president started his second term. However, a Fed statement indicated the future path of monetary policy was not discussed and stressed that decisions would be made free of political considerations.

Trump slapped across-the-board 10% duties on all U.S. imports, part of an effort to even out a trading landscape in which the U.S. ran a record $140.5 billion deficit in March. In addition to the general tariffs, Trump launched selective reciprocal tariffs much higher than the 10% general charge.

Since then, though, Trump has backed off the more severe tariffs in favor of a 90-day negotiating period with the affected countries. Earlier this week, an international court struck down the tariffs, saying Trump exceeded his authority and didn’t prove that national security was threatened by the trade issues.

Then in the latest installment of the drama, an appeals court allowed a White House effort for a temporary stay of the order from the U.S. Court of International Trade.

Economists worry that tariffs could spark another round of inflation, though the historical record shows that their impact is often minimal.

At their policy meeting earlier this month, Fed officials also expressed worry about potential tariff inflation, particularly at a time when concerns are rising about the labor market. Higher prices and slower economic growth can yield stagflation, a phenomenon the U.S. hasn’t seen since the early 1980s.

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German inflation May 2025

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19 May 2025, Berlin: Apricots are sold at a greengrocer for 7.98 euros per kilogram. Grapes and papaya are also on offer.

Photo by Jens Kalaene/picture alliance via Getty Images

Germany’s annual inflation hit 2.1% in May approaching the European Central Bank’s 2% target but coming in slightly hotter than analyst estimates, preliminary data from statistics office Destatis showed Friday.

The print compares with a 2.2% reading in April and with a Reuters projection of 2%.

The print is harmonized across the euro zone for comparability.

So-called core inflation, which strips out more volatile food and energy prices, dipped slightly from April’s 2.8% to 2.9% in May. The closely watched services print meanwhile eased sharply, coming in at 3.4% compared to 3.9% in the previous month.

Energy prices fell markedly for the second month in a row, tumbling by 4.6% in May.

Germany’s consumer price index has been closing in on the European Central Bank’s 2% target over recent months, in a positive signal amid ongoing uncertainty about the economic outlook for Europe’s largest economy.

Domestic and global issues have mired expectations for Germany’s financial future.

One the one hand, U.S. President Donald Trump’s tariffs could damage economic growth, given Germany’s status as an export-reliant country, though the potential impact of such duties on inflation remains unclear. But frequent policy shifts and developments have been muddying the picture.

On the other hand, Germany’s newly minted government is starting to get to work and has made the economy a top priority. Questions linger about when and to what extent the new Berlin administration’s policy plans might be realized.

The ECB is set to make its next interest rate decision on June 5, with traders last pricing in an over 96% chance of a quarter point interest rate reduction, according to LSEG data. Back in April, the central bank had cut its deposit facility rate by 25 basis points to 2.25%.

This is a breaking news story, please check back for updates.

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