U.S. payroll growth reached 177,000 in April, surprising economists who had expected a slowdown. Following the release of this data, stock market futures and Treasury yields both climbed. Seema Shah, chief global strategist at Principal Asset Management, commented, “We can push recession concerns to another month. The job numbers remain very robust, indicating significant economic resilience before the tariff shock. While the economy might weaken in the coming months, there's a good chance the U.S. can avoid recession if it steps back from the tariff brink in time.” The report emerged during a period of uncertainty sparked by President Trump’s decision to implement 10% "liberation day" tariffs on U.S. imports, along with threats of reciprocal duties on multiple countries. However, Trump later postponed these reciprocal tariffs for 90 days to allow for ongoing negotiations. Recent White House statements suggest that deals with some affected nations are likely, although no formal agreements have been announced yet. The strong employment figures shifted market expectations, pushing back the anticipated timeline for an interest rate cut until July, according to the CME Group's FedWatch tool. This tool gauges market sentiment based on futures pricing. Healthcare led the way in job creation, adding 51,000 positions. Other sectors that saw growth included transportation and warehousing (29,000 jobs), financial activities (14,000 jobs), and social assistance. Conversely, the federal government reported a loss of 9,000 jobs, part of a trend initiated by Trump's efforts to streamline public sector employment. Since January, federal jobs have decreased by 26,000, though the Bureau of Labor Statistics (BLS) notes that furloughed employees receiving severance are not counted as unemployed. Manufacturing experienced a minor decline, losing 1,000 jobs. According to Daniel Zhao, lead economist at job review site Glassdoor, “This first jobs report post-Liberation Day is much too soon to observe the impacts of tariffs. Even May might be premature as businesses work through their inventories. However, today’s report sets a benchmark to measure future tariff effects.” Wages showed a modest increase, with average hourly earnings rising 0.2% for the month, below the expected 0.3%. The annual wage growth rate of 3.8% was 0.1 percentage points lower than predicted and marked the lowest level since July 2024. Revisions to previous months' job totals also revealed downward adjustments. The BLS revised the March figure down by 43,000 and the February total by 15,000, bringing the new February number to 102,000. The timing of this report is critical, coming just before the Federal Reserve’s policy meeting next week. Fed officials are currently in a quiet period, not making public statements leading up to the meeting. Nonetheless, recent comments suggested heightened awareness of potential inflationary pressures due to tariffs. The Fed is likely to adopt a wait-and-see approach before deciding on interest rate changes. Market expectations indicate that the Fed will keep its benchmark short-term interest rate unchanged at the upcoming meeting but may consider a quarter percentage point cut by July, followed by two or three additional cuts by year-end. Following the report, President Trump reiterated his call for the Fed to lower interest rates. In a post on Truth Social, he stated, “Consumers have been waiting for years to see pricing come down. NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!” Overall, the April jobs report paints a picture of a resilient U.S. labor market despite the looming tariff issues, providing some relief to investors and policymakers alike.