The U.S. labor market showed signs of strength in April, with hiring momentum topping estimates despite the impact of trade tariffs across industries.

Nonfarm payrolls increased by 177,000 last month, slightly down from a downwardly revised 185,000 in March, according to data released Friday by the Bureau of Labor Statistics.

The outcome surpassed both economist forecasts for a 130,000 gain and betting markets – tracked by CFTC-regulated platform Kalshi – which had priced in a 90,000 increase.

In April, employment continued to rise across several sectors, including health care, transportation and warehousing, financial activities, and social assistance, while federal government jobs declined.

The health care sector added 51,000 jobs—closely in line with its 12-month average of 52,000. Notable increases were seen in hospitals, up 22,000, and ambulatory health care services, up 21,000.

Transportation and warehousing employment rose by 29,000, rebounding from a modest gain of 3,000 in March. Within the sector, job growth was concentrated in warehousing and storage, up 10,000, couriers and messengers, up 8,000, and air transportation, up 3,000.

Federal government employment declined by 9,000, reflecting rising layoffs amid reforms led by Elon Musk's Department of Government Efficiency (DOGE).

The unemployment rate remained unchanged at 4.2%, as expected.

Wage growth lost some momentum. Average hourly earnings rose 0.2% on the month, down from both the prior and expected 0.3%. On an annual basis, wages were up 3.8%, steady from March but slightly below the forecasted 3.9%.

Ahead of the April jobs report, money markets had priced in a 58% probability of a 25-basis-point rate cut at the Federal Reserve's June meeting, according to CME FedWatch.

Market Reactions

The stronger-than-expected jobs data pushed the U.S. dollar and Treasury yields higher and boosted gains across major equity indices.

The U.S. Dollar Index, as tracked by the Invesco DB USD Index Bullish Fund ETF , trimmed session losses, down 0.2% by 8:35 a.m. ET.

Treasury yields also rose, with the 2-year yield—often seen as a proxy for near-term rate expectations—rising 3 basis points to 3.74%.

S&P 500 futures were up 0.7%, while tech stocks rose 0.8%. On Thursday, the SPDR S&P 500 ETF Trust ( SPY ) closed 0.7% higher, marking its eighth consecutive session of gains.

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