April Non-Farm Payroll Preview: Surface slows down but core remains tight Wage increases strengthen expectations that the Federal Reserve will not cut interest rates within the year.

The market generally expects an increase of 62,000 new jobs in April, with the unemployment rate remaining at 4.3%; there is hope that the month-on-month wage growth will rise to 0.3%, further solidifying expectations that the Federal Reserve will not cut interest rates this year. The growth in U.S. employment in April is expected to slow compared to the previous month, mainly due to the seasonal boost from warmer weather fading and the diminishing impact of the return of striking healthcare workers to their jobs. However, this does not mean that there has been a substantial change in the fundamentals of the labor market - the market expects the unemployment rate to remain at 4.3%. The highly anticipated April non-farm payroll report to be released by the U.S. Department of Labor on Friday is also expected to show an increase in wage growth for the month. This will further strengthen the financial market's expectations that the Federal Reserve may keep interest rates unchanged until 2027. Economists point out that the impact of the conflict between the U.S. and Iran on the job market is not yet evident in the data. The rate of growth in April may slow significantly; focus on the three-month average to gauge the trend Economists and policymakers generally believe that the labor market is in a state of "slow hiring, slow firing" stalemate. Behind this situation is the uncertainty brought about by the Trump administration's trade and immigration policies, as well as recent tensions in the Middle East that have raised prices for gasoline, diesel, and commodities transported through the Strait of Hormuz, indirectly suppressing the economy. "The current situation is ongoing - we haven't had enough time for geopolitical conflicts to truly change labor demand, as hiring decisions are typically made a few months before actual recruitment," said Joe Brusuelas, chief economist at RSM. "The Federal Reserve will focus on wage data and, most importantly, the unemployment rate. These data will further confirm the new market consensus: there will be no rate cuts this year due to a weak labor market." According to surveys of economists, non-farm payroll employment is expected to increase by 62,000 in April, compared to a strong rebound of 178,000 in March. Forecasts range from a decrease of 15,000 to an increase of 150,000. Since mid-2025, non-farm data has shown significant fluctuations, with increases and decreases alternating. Economists attribute some of the fluctuations to annual adjustments in the government's statistical model known as the "birth-death model" - which is used to estimate employment changes each month due to business openings or closures. Some analysts point out that large fluctuations in the number of business registrations and closures make it difficult for the Bureau of Labor Statistics, which compiles the employment report, to accurately measure the job growth brought about by new businesses. In addition, factors such as weather, strikes, federal government layoffs, and the Trump administration's crackdown on illegal immigration leading to significant changes in the labor force population have exacerbated the volatility of the monthly data. Therefore, economists recommend focusing on the three-month moving average of non-farm data to better capture the true trend of the labor market. "Smoothing out the data from the past few months still points to moderate positive growth," said Veronica Clark, economist at Citigroup. "Considering that the scale of immigration inflows has changed significantly, resulting in the average monthly employment growth this year being significantly lower than in previous years, the moderate growth in monthly data itself is not worrisome." In the first quarter of this year, the average monthly job growth in the United States was approximately 68,000. Economists estimate that to keep up with the growth of the working-age population, the U.S. needs to create 0 to 50,000 jobs per month. As the so-called "break-even" employment growth rate has been significantly lower in recent years, economists expect that even if job growth slows significantly, the unemployment rate will not experience a sharp increase. Healthcare and social assistance remain key sectors, manufacturing boosted by pre-orders From an industry perspective, the healthcare and social assistance sectors are expected to continue to lead job growth in April, reflecting the rigid demand brought about by an aging population, despite a slowing growth rate. "The Affordable Care Act subsidy gaps, restrictions on Medicaid expansion in many states, tariff policies, and the skyrocketing H-1B visa fees for immigrant doctors and nurses are all unfavorable factors," noted Diana Swan, chief economist at KPMG. "Rural and impoverished city hospitals rely heavily on H-1B visas to bring in doctors and nurses to fill vacancies, but under the new regulations, with visa costs as high as $100,000, they simply cannot afford it. Many rural hospitals have already closed down." Employment in the manufacturing sector is expected to increase further in April, mainly due to enterprises placing advance orders for supplies in anticipation of rising prices and supply shortages resulting from tensions in the Middle East. Government employment is expected to continue to decline - nine out of the past 12 months have seen decreases, reflecting the White House's intention to reduce the size of the federal government. However, some government agencies have begun to try to replenish their personnel. Wage growth rebounds but faces erosion from inflation, real purchasing power under pressure In terms of wages, it is expected that the average hourly wage in April will increase by 0.3% month-on-month, compared to a 0.2% increase in March. This will raise the year-on-year nominal wage growth from 3.5% in March to 3.8%. The steady performance of nominal wages is in line with the overall stability of the labor market, but some economists also point out that some of the increase comes from a reduction in average weekly working hours - from 34.3 hours in March to 34.2 hours, with April expected to remain at 34.2 hours. "This, to a certain extent, indicates that the recent seemingly strong job growth is more of a reflection of technical factors rather than genuine economic activity and an actual increase in labor demand," said Clark from Citigroup. However, the stronger nominal wage growth is being eroded by high inflation - currently, gasoline prices have surpassed $4.50 per gallon. Therefore, some economists believe that the apparent stability of the labor market masks structural cracks within the economy: increased financial pressure on low-income households, while high-income households, due to the wealth effect from the stock market, remain the main drivers of consumption. "The bottom end of the income spectrum is experiencing distress and cutting back on expenses," said Song Wansong, professor of finance and economics at Loyola Marymount University. "If the high-income segment also begins to feel a similar pressure, then the U.S. economy will be in real trouble."