As Americans weighed the cost pressures of higher groceries and gas, recent U.S. economic data continued to point to a labor market that has not broken down even as inflation worries linger. The U.S. Labor Department reported that unemployment held at 4.3% while employers added 115,000 jobs in the latest monthly snapshot, the report noting the figures came amid the economic shock associated with the war with Iran.
The job growth came in above what many forecasters had expected, though it slowed from March’s pace. The Labor Department said that hiring was better than the 65,000 that economists had expected, after 185,000 jobs were created in March, while the unemployment rate remained low at 4.3%. The report also said healthcare added 37,000 jobs and retailers added 22,000, while manufacturers cut 2,000 jobs in April and have shed 66,000 jobs over the past year.
Looking beyond the monthly jobs total, weekly unemployment-insurance claims rose but stayed near low historical levels. The Labor Department reported that the number of Americans filing for unemployment benefits increased by 10,000 to 200,000 for the week ending May 2. The report said that was fewer than the 205,000 applications analysts surveyed by FactSet expected, and it noted that the previous week’s claims figure was revised upward to 190,000.
A separate labor-market gauge from the Labor Department showed job openings largely unchanged in March, while hiring improved before the full effects of the Iran war hit. The Job Openings and Labor Turnover Survey reported that employers posted 6.87 million job openings in March, compared with 6.92 million in February. The report said layoffs rose in March, but hiring improved, with employers adding 5.55 million gross jobs—the most since February 2024—while more workers also quit their jobs.
Borrowing costs, however, moved in the opposite direction from the labor-market stability. Freddie Mac said the average long-term U.S. mortgage rate rose again, reflecting continued volatility in bond markets and concerns about inflation linked to surging oil prices tied to the Iran war. The report said the benchmark 30-year fixed rate rose to 6.37% from 6.3% the prior week, and it described the move as the second consecutive weekly increase that brought the average rate back to where it was four weeks earlier.
Stocks finished the week near record levels as investors balanced the labor data and corporate earnings with the threat that higher energy costs and uncertainty could weigh on the economy. The report said the S&P 500 climbed 0.5% toward an all-time high after the labor-market news, and it cited expectations that the Iran conflict would not produce a worst-case scenario for the global economy.
The report also pointed to the role of oil and shipping routes in shaping market anxiety, noting that hopes for reopening the Strait of Hormuz to allow oil tankers to deliver crude from the Persian Gulf contributed to optimism. Even with labor indicators showing continued strength, the combination of higher mortgage rates and rising weekly claims suggested households and businesses may still face tighter financial conditions as the economic impact of the Iran war works through the broader economy.