Payrolls Add 115K in April, Unemployment Holds at 4.3%

The U.S. labor market posted a modest gain in April 2026, with nonfarm payrolls rising by 115,000 — a pace that reflects a market running well below the prior year's trend. The unemployment rate held steady at 4.3 percent, unchanged from March, while the labor force participation rate edged down to 61.8 percent. The headline number was supported primarily by health care, transportation and warehousing, and retail trade, while ongoing federal government workforce reductions continued to act as a drag.

Headline Payrolls and Revisions

April's 115,000 gain, while positive, reflects a labor market that has cooled considerably over the past year. On a year-over-year basis, total nonfarm payrolls grew by just 251,000, or 0.2 percent — a marked deceleration from the pace seen in 2022 and 2023. The establishment survey's current employment statistics model relies on trend-based estimators for business formations and closures, which means initial prints during periods of decelerating economic momentum should be interpreted with appropriate caution.

Revisions to the prior two months were a net negative. The February estimate was revised down by 23,000, from -133,000 to -156,000, while March was revised up by 7,000, from +178,000 to +185,000. Combined, February and March employment is now 16,000 lower than previously reported — a modest but directionally consistent signal of softening. The net revision of -16,000 is below the market-moving threshold but reinforces the broader narrative of decelerating job growth.

Wage Growth Continues to Moderate

Average hourly earnings for all private-sector employees rose 6 cents, or 0.2 percent, in April, bringing the level to $37.41. On a year-over-year basis, earnings are up 3.6 percent — a pace that is cooling toward the range consistent with the Fed's 2 percent inflation target when accounting for trend productivity growth of roughly 1 to 1.5 percent annually. The 3.6 percent YoY print is down from the 2022 peak and represents a trajectory of gradual normalization rather than persistent inflationary pressure.

Production and nonsupervisory employees saw a slightly larger monthly gain, with hourly earnings rising 11 cents, or 0.3 percent, to $32.23. The average workweek for all private employees edged up by 0.1 hour to 34.3 hours, a marginal improvement that suggests employers are modestly extending hours before committing to new hires.

Unemployment Rate and Labor Force Participation

The household survey told a more nuanced story. The unemployment rate remained at 4.3 percent, with the number of unemployed persons little changed at 7.4 million. However, the labor force participation rate slipped 0.1 percentage point to 61.8 percent — and is now down 0.7 percentage points year-over-year. This declining participation trend matters: when unemployment holds steady partly because workers are leaving the labor force rather than finding jobs, the headline rate overstates the health of the labor market.

Notably, the number of people employed part time for economic reasons — those who want full-time work but cannot find it or had hours reduced — rose by 445,000 to 4.9 million in April. This increase in involuntary part-time employment is a leading indicator of labor market stress and warrants attention in coming months. Long-term unemployment (27 weeks or more) was essentially unchanged at 1.8 million, accounting for 25.3 percent of all unemployed persons.

Sector Breakdown

Gains were concentrated in a handful of service-sector industries:

• Health care: +37,000, in line with the 12-month average gain of 32,000; nursing and residential care facilities added 15,000 and home health care services added 11,000
• Transportation and warehousing: +30,000, driven by couriers and messengers (+38,000); however, the sector is still down 105,000 from its February 2025 peak
• Retail trade: +22,000, led by warehouse clubs and supercenters (+18,000) and building material dealers (+13,000), partially offset by losses in department stores (-7,000)
• Social assistance: +17,000, with individual and family services contributing 24,000 jobs
• Federal government: -9,000, continuing a decline that has now totaled 348,000 jobs, or 11.5 percent, since the October 2024 peak
• Information: -13,000, with losses spread across motion picture and sound recording industries and computing infrastructure providers

Labor Market Assessment

April's report paints a picture of a labor market that is gradually loosening rather than deteriorating sharply. The headline payroll gain is positive but modest, wage growth is decelerating toward a sustainable pace, and the unemployment rate is stable — though the rise in involuntary part-time work and the continued decline in participation suggest the underlying picture is softer than the headline 4.3 percent unemployment rate implies.

The ongoing contraction in federal employment — now down 348,000 from peak — represents a structural headwind that is unlikely to reverse quickly. Meanwhile, the information sector's persistent losses reflect cyclical and secular pressures in technology and media that are compounding the broader slowdown.

The next Employment Situation release, covering May 2026, is scheduled for Friday, June 5, 2026. The key data point to watch will be whether the rise in involuntary part-time employment — which jumped 445,000 in April — reverses or accelerates, as that will determine whether April's softness was a one-month anomaly or the beginning of a more sustained deterioration in labor market quality.