The U.S. labor market remained resilient in April, with employers adding 177,000 jobs, a solid showing despite ongoing economic uncertainty that has caused many employers to put hiring plans on hold.

The unemployment rate held steady at 4.2 percent, near historic lows, according to a jobs report released Friday by the Labor Department. Economists had largely expected growth to cool, following the addition of 185,000 jobs in March, figures that were revised downward.

The labor market has been a pillar of strength for years, helping to prop up the economy through a period of high inflation and elevated interest rates. Economists have been on high alert that surrounding weakness — including data this week showing the U.S. economy shrank in the first three months of 2025 — could drag down the labor market. But, so far, the slowdown has been gradual.

“Today’s report is a welcome surprise,” Ger Doyle, U.S. manager at ManpowerGroup, wrote in an email. “Overall, the labor market is not in crisis but at a crossroads.”

Employers continued to add key services jobs in April, with gains in health care, transportation and warehousing, financial activities, and social assistance leading the way. Federal government employment declined for the third straight month, reflecting ongoing layoffs and firings by the Trump administration.

The retail industry also lost jobs in April, as uncertainty over new tariffs led many consumers and businesses to rethink their plans. Americans are spending more cautiously, by cutting back on travel and dining out, while many employers are loading up on equipment but pausing hiring and expansion plans.

The strength in the labor market was enough to buoy the stock market. All three major indexes were up by more than 1 percent Friday around lunchtime, with the Dow Jones Industrial Average jumping more than 500 points.

The solid report also makes it likely the Federal Reserve will hold interest rates firm at its meeting next week. Even though inflation is cooling, policymakers have expressed concerns that tariffs could push prices up further.

President Donald Trump on Friday cited the April jobs report as “more good news” in the economy and suggested the central bank — which operates independently of the government — should slash borrowing costs. “THE FED SHOULD LOWER ITS RATE!!!,” he wrote on his social media site, Truth Social.

But many economists say it’s too soon to declare victory. It could take several more months before tariff-related disruptions work their way through businesses’ hiring practices, said Daniel Zhao, lead economist at job-review site Glassdoor.

“There is still a big question mark hanging over the job market,” he said. “Clearly, the full impacts from the tariffs are not here yet.”

The question now is how long the labor market can withstand rising uncertainty across the economy. Gross domestic product, the broadest measure of economic activity, contracted by 0.3 percent in the first quarter of the year, a sudden pullback after almost three years of steady growth. Economists attributed much of that drop to a mismatch in trade, as U.S. businesses stockpiled imports ahead of tariffs, as well as a large decline in federal government spending.

Already, there are signs of strain in the job market. Employers are posting fewer openings, and the number of people who report being permanently out of a job is at its highest level since 2021. Last week, 241,000 Americans filed new applications for unemployment benefits, an increase of 18,000 from the week before.

Widespread funding cuts and layoffs by the U.S. DOGE Service (the Department of Government Efficiency), which began earlier this year, may also become more evident in April jobs data. Even though federal workers account for a small share of the total workforce, economists say recent layoffs and firings are likely to ripple into other industries across contracting companies and nonprofits.

“Employment tied to industries that receive bulk contracting dollars, such as health care, scientific research, education, transportation and manufacturing, are most vulnerable,” Seema Shah, chief global strategist at Principal Asset Management, said in an email.

The chill from federal funding freezes has already been far-reaching. Brittany Frodge, a lecturer at Ohio State University, recently found out she will be out of a job starting May 15. Her position teaching Spanish will soon go to a graduate student.

“Everywhere I look, there’s a hiring freeze because there’s so much paranoia and uncertainty about the new administration,” she said. “There aren’t as many tenure-track positions, and there are severe limits on research.”

Frodge has applied for every opening she has found that fits her qualifications, she said: a grand total of two, including one in Arkansas. For now, her husband still has a job at Ohio State, teaching in the philosophy department, but she worries about long-term stability.

“It’s a really difficult moment to get work,” she said.