The American job market demonstrated surprising resilience last month, adding 115,000 new positions despite the significant economic disruption caused by the Iran war. This figure surpassed forecasters' expectations of 65,000 new jobs, though it marked a deceleration from the 185,000 jobs created in March. The national unemployment rate held steady at a low 4.3%.
The conflict in Iran has triggered the most substantial disruption to global oil supplies in history, pushing average US gasoline prices beyond $4.50 a gallon this week. However, its impact on the American job market has, thus far, been limited.
Economists had anticipated a slowdown in April hiring, with projections suggesting 65,000 new jobs across US companies, nonprofits, and government agencies. While this number would typically be considered unimpressive, current economic conditions are far from ordinary. Factors such as Baby Boomer retirements and President Donald Trump's immigration crackdown mean fewer individuals are competing for work, reducing the number of new jobs required to maintain a stable unemployment rate.
Matthew Martin of Oxford Economics notes that the "break-even point" – the number of new jobs needed monthly to prevent a rise in unemployment – is now close to zero.
The economic shock from the Iran war began after the US and Israel launched attacks on February 28, leading Iran to close the Strait of Hormuz, a critical passage for approximately a fifth of the world's oil and liquefied natural gas. This disruption has led to a painful surge in energy costs and prompted many economists to revise down their global and US economic growth forecasts. Yet, the fallout has not yet manifested in the domestic job market.
Recent indicators have pointed to underlying strength. Payroll processor ADP reported that private employers added a robust 109,000 jobs in April, marking the fastest pace since January 2025. Furthermore, a Labor Department report indicated that gross hiring in March – before accounting for those who left or lost jobs – was the strongest in over two years. The economy is also benefiting from substantial tax refund checks this spring, stemming from Trump's tax cut legislation enacted last year, which encourages consumer spending and incentivizes companies to expand their workforce.
The job market is showing intermittent signs of recovery following a challenging 2025, when employers created only 9,700 jobs per month, the lowest outside a recession year since 2002, largely due to high interest rates and uncertainty surrounding Trump's economic policies. This year has seen uneven progress, with strong job growth in January (160,000) and March (178,000), contrasted with a decline in February (-133,000).
Hiring has been predominantly driven by the healthcare sector, which has added 360,000 jobs over the past year, catering to an aging American population. In contrast, other sectors collectively cut 120,000 jobs over the same period. Diane Swonk, chief economist at KPMG, cautions that this healthcare hiring boom may not be sustainable. She points to the expiration of Affordable Care Act subsidies, cuts to Medicaid spending under Trump's tax bill, and a new $100,000 fee for H-1B visas, which disproportionately affects rural and poor urban hospitals reliant on foreign doctors and nurses.
Looking ahead, Oxford's Martin questions whether the war will reverse this hiring momentum. He notes that "heightened uncertainty impacts the labor market with a lag, and the fiscal stimulus from higher refunds will eventually wane, particularly as gas prices remain elevated."
