The labor market showed signs of improvement in April, with the U.S. economy adding 115,000 jobs while the unemployment rate remained at 4.3%, according to the U.S. Bureau of Labor Statistics’ April 2026 Employment Situation report. Payroll growth came in above economists’ expectations following several months of softer hiring activity. However, revisions to February and March payrolls reduced prior job growth estimates by a combined 16,000 positions, reinforcing that overall hiring momentum remains moderate. For the 3^rd consecutive month, small businesses led the job growth according to ADP’s data.

Labor market conditions continue to vary significantly across industries. Job growth was concentrated in a relatively small number of sectors, with healthcare adding 37,000 jobs, transportation and warehousing 30,000, and retail trade 22,000. At the same time, several sectors continued to weaken. Federal government employment declined by 9,000 jobs and is now down more than 348,000 positions since October 2024. Technology employment also declined further across telecommunications, media, and data processing-related segments. Manufacturing employment showed little change during the month.

Labor force participation declined to 61.8%, and the number of individuals working part-time for economic reasons increased by 445,000 in April, indicating that more workers are accepting reduced hours or remain unable to secure full-time employment.

Average hourly earnings increased 0.2% month over month and 3.6% year over year.

Despite all the news headlines regarding layoffs driven by AI, the labor market is showing encouraging signs of growth, with momentum continuing to vary by industry.