April Jobs Report Preview: Key Numbers That Could Move Stocks

This Friday, the spotlight is on the upcoming jobs report for April, which promises to provide important insights into the current state of hiring as we move into the second quarter.

The Bureau of Labor Statistics is set to unveil its data at 8:30 a.m. ET, and economists speculate that nonfarm payrolls will reveal a modest increase of about 135,000 jobs this month, maintaining the unemployment rate at a steady 4.2%. This prediction comes on the heels of a robust March where the economy saw an impressive addition of 228,000 jobs, even as the unemployment rate inched up to 4.2%.

Wall Street’s expectations for the report are as follows, based on preliminary data analysis:

What’s intriguing is that the reverberations of the recent tariff implementations appear to be taking shape in the economy, as indicated by a report from the Bureau of Economic Analysis showing that economic growth actually contracted in the first quarter for the first time in three years. Export activity faced strain due to a rush in imports before tariffs, affecting overall growth and sentiment in the manufacturing sector. Despite this, the labor market’s scars have yet to be fully revealed.

Citi’s (NYSE:C) economists provided a thoughtful disclaimer about interpreting the upcoming data. "Much like March, a strong outcome for April may seem a bit stale; it reflects labor market dynamics during the initial weeks of the month and may not yet capture the repercussions from the April 2 tariff announcement." Moreover, recent trends hint at early signs of fatigue in the labor market. Notably, unemployment claims surged to a two-month high during the last full week of April, while ongoing unemployment insurance filings reached levels unseen since November 2021.

April’s assessments have not been without their hiccups. A report on private payroll changes fell short of expectations, coupled with data revealing job openings languishing close to their lowest figures since December 2020. ADP's chief economist, Nela Richardson, aptly described the current atmosphere as one of “unease.” She remarked, "Employers are grappling with a blend of policy and consumer uncertainty against the backdrop of mostly positive economic reports, making hiring decisions quite the conundrum."

As stock traders anticipate the implications of these data points, the markets currently lean towards a 60% probability that the Federal Reserve will consider implementing interest rate cuts in their upcoming June meeting, according to the CME FedWatch Tool. With so much hanging in the balance, this jobs report could be a critical indicator for traders.