US job growth likely downshifted in April as employers grew more cautious, with new data expected to show slower hiring and a slight uptick in unemployment, according to analyst forecasts.
Comerica is predicting a modest gain of just 115,000 jobs for the month—far below March’s strong showing—and sees the unemployment rate ticking up to 4.3% from 4.2%.
“Employers scaled back hiring this month,” said Bill Adams, chief economist at Comerica. “Employers haven’t made big layoff announcements, but late April’s increase in continued jobless claims suggests that they turned more cautious toward hiring last month while sorting through tariffs’ impact.”
Adams said the April report will be especially important in helping clarify the direction of the economy, noting that recent GDP numbers offer less insight than usual. “Given the big changes in the economy in April, the first quarter’s GDP report says less than usual about the economy’s trajectory. That makes April’s jobs data more important for understanding the economy.”
Comerica also expects the average workweek to shorten slightly to 34.1 hours, with average hourly earnings rising 0.3% for the month—numbers that suggest consumers may still have some spending power, but momentum is fading.
Wages hold steady, hours may dip
Bank of America, meanwhile, is expecting a more solid print, forecasting a gain of 165,000 jobs—above the consensus—and sees the unemployment rate holding steady at 4.2%.
“April payrolls are likely to rise by a robust 165,000, higher than consensus expectations,” BofA economists said in a note. “Given the muted claims data in the survey week, we do not expect DOGE-driven job cuts to be a sizable drag.”
But they also flagged risks on the horizon. “Immigration & trade restrictions are likely to weigh on payrolls in the coming months, but we don't think they'll have a substantial impact in April. That said, risks are to the downside.”
Wages are expected to rise 0.3% again in April, and average weekly hours are likely to hold at 34.2, supporting continued—but moderate—income growth. Still, Bank of America pointed to sectors like leisure and hospitality, construction, and health care as areas to watch for possible softness down the road.
Deutsche Bank is calling for a 125,000 job gain, citing a natural pullback after a strong March, particularly in sectors like retail and hospitality.
“Our headline and private payroll forecasts reflect payback from strong March hiring – particularly within the leisure/hospitality and retail sectors,” Deutsche Bank economists said.
They also expect the unemployment rate to hold at 4.2% and hourly earnings to rise 0.3%, but see a slight dip in the average workweek to 34.1 hours. Overall, they still see income growth as solid, but warned that rising tariffs could weigh on consumer spending later this year.
“The upshot of our employment forecasts is that the annual growth rate of our payroll proxy for nominal income growth would rise by roughly 40bps to 4.8% – a still sturdy level,” they said. “However, with tariff-related inflation in the pipeline, real consumer spending growth is likely to drop noticeably in H2.”