• The U.S. economy added 177,000 nonfarm payrolls in April, beating expectations of 138,000, while the unemployment rate held steady at 4.2%. Wage growth came in slightly below expectations, rising 0.2% month-over-month and 3.8% year-over-year.

• The labor market showed surprising strength in the face of President Trump’s “Liberation Day” tariff announcement on April 2, which had sparked fears of an economic slowdown. Notably, job gains were strongest in the transportation and warehousing sector, while federal employment declined.

• However, some warning signs are emerging: jobless claims reached a two-month high, and private sector hiring slowed to its weakest pace since July 2024.

• First-quarter GDP contracted for the first time in three years due to a surge in imports before tariffs took effect. Manufacturing and consumer sentiment have also taken a hit.

       What’s Next?

• Despite rising macro uncertainty and tariff-related concerns, the job market’s resilience is encouraging. However, underlying softness in wages and forward-looking indicators suggest caution may still be warranted in the months ahead. Markets might be breathing a sigh of relief—for now.