April 2025 Unemployment Rate Holds Steady at 3.4%, Job Market Shows Resilience
In April 2025, the U.S. unemployment rate remained stable at 3.4%, defying expectations of a rise amid interest rate hikes. Job growth shows some slowdown, but labor market strength persists with historic lows in Black unemployment.
Taylor Tompkins brings over ten years of experience reporting on business, finance, and economic trends. As Economics Editor at Investopedia, she synthesizes expert insights and data analysis to clarify complex economic developments for readers.
Despite widespread concerns about the impact of rising interest rates, the unemployment rate in the United States stayed consistent between 3.4% and 3.7% for more than a year. In April 2024, the rate slightly decreased to 3.4%, according to the latest government data released last Friday. The total number of unemployed individuals dropped to 5.7 million, outperforming economists’ forecasts that had anticipated a minor increase.
Remarkably, the unemployment rate among Black workers reached its lowest point since tracking began in 1972, marking a historic milestone in labor market equity.
While overall job growth has slowed, averaging 222,000 new jobs over the past three months—the lowest since January 2021—the labor market remains robust.
Wage growth presents a mixed signal for economists debating the Federal Reserve’s future interest rate moves. Hourly earnings rose by 0.5% in April to $33.36 and increased 4.4% year-over-year. This wage growth is critical in assessing inflation pressures.
Moody’s Chief Economist Mark Zandi noted on Twitter, "The slight drop in unemployment to 3.4% is unusual. To better control wage inflation, a modest increase in unemployment might be necessary to convince the Fed to pause rate hikes."
Wage trends are closely monitored by policymakers to detect any wage-price spirals that could exacerbate inflation. However, opinions differ on whether the current inflation cycle is driven by wage increases.
Heidi Shierholz, former Chief Economist at the U.S. Department of Labor and current head of the Economic Policy Institute, argues the labor market is not overheating. She tweeted, "Wage growth is generally slowing. The current tight labor market can be sustained if the Fed refrains from aggressive rate hikes."
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