US employers defy economic shock from Iran war and add a surprisingly strong 115,000 jobs in April

Audio By Carbonatix

WASHINGTON (AP) — America’s employers delivered a surprising 115,000 new jobs last month despite an economic shock from the Iran war.

Hiring beat the 65,000 jobs forecasters had expected, though it decelerated from the 185,000 jobs created in March. The unemployment rate remained at a low 4.3%, the Labor Department reported Friday.

The Iran war has caused the biggest disruption of global oil supplies in history and sent average U.S. gasoline prices surging past $4.50 a gallon this week. But the conflict hasn’t done much damage to the American job market so far. And the import taxes — tariffs — that President Donald Trump imposed last year haven't turned out to be as high and as damaging as originally feared.

“The labor market is not booming, but it is proving harder to break than` many feared,’’ said economist Olu Sonola of Fitch Ratings.

Healthcare added 37,000 jobs last month and transportation and warehousing companies 30,000. However, manufacturers cut 2,000 jobs in April and have shed 66,000 jobs over the past year despite Trump’s protectionist policies aimed at creating factory jobs.

“Businesses to some extent are viewing the conflict in Iran as temporary,'' said Gus Faucher, chief economist at the financial firm PNC. ”We’re seeing strong business investment, particularly around tech and AI. The economy continues to expand. We’ve weathered some shocks. The worst of the tariff impact is likely over.''

Still, Faucher cautioned that "the longer conflict in Iran lasts, the higher energy prices go, the longer they stay elevated the greater the drag on the economy.''

Among those worrying is Michael Cramer, co-founder and CEO of online retailer Adagio Teas. He expects to freeze hiring this year. He typically adds anywhere from five to six workers per year to help pack up online tea orders at the company’s warehouse in East Rutherford, New Jersey. Adagio Teas, which has about 50 workers, has seen a slight drop in sales after the Iran war drove up gasoline prices and squeezed shoppers, particularly those in lower-income brackets. Cramer is worried that shoppers are opting for less expensive supermarket tea to cut costs.

“You only hire when you have more orders that you can fill,” he said.“I don’t envision us being in that position for the remainder of the year. I think the remainder of this year is going to be fairly bumpy.”

Labor Department revisions shaved 16,000 jobs from February and March payrolls.

Average hourly earnings rose 0.2% from March and 3.6% from April 2025, consistent with the Federal Reserve’s 2% inflation target.

The number of people in the U.S. labor force dropped last month, and the share of those working or looking for work — the so-called labor force participation rate — dropped to 61.8%, lowest since October 2021.

After the U.S. and Israel launched their attacks Feb. 28, Iran shut down the Strait of Hormuz, through which about a fifth of the world’s oil and liquefied natural gas passes. The disruption has caused a painful increase in the price of energy and led many economists to downgrade their estimates for global and U.S. economic growth.

But the job market keeps chugging along this year.

The economy is getting a boost from big tax refund checks this spring, arising from Trump’s tax cut legislation last year; the refunds allow consumers to spend more freely, giving companies an incentive to add workers in response to rising sales.

The job market is showing intermittent signs of recovery after a bleak 2025. Employers last year created just 9,700 jobs a month, fewest outside a recession year since 2002. High interest rates and uncertainty over Trump’s economic policies held back hiring.

The March and April hiring figures marked the first consecutive months of job growth above 100,000 since the end of 2024.

The recent uptick in hiring raises hopes that the job market will break out of a recent rut – in which Americans who have jobs are relatively secure from layoffs but jobseekers struggle to find work.

Angela Paniccia, 33, of Queens in New York City was laid off by an educational travel company in December. The job search can be frustrating. “You’ll never hear back or you’ll get just a generic ‘We’re moving on with someone else’ without feedback,’’ she said.

Many of the openings at colleges and other employers in her field simply don’t pay enough to support someone living in one of the country’s most expensive cities. To help with the rent, she’s been working part-time for a caterer. “I’ve always had a full-time job,’’ he said. “Admittedly, I’m struggling with the loss of daily routine.’’

U.S. hiring has been dominated by one industry: Healthcare companies, catering to an aging American population, have added 456,000 jobs over the past year; other employers have combined to cut 205,000 over the 12 months that ended in April.

Still, Heather Long, chief economist at Navy Federal Credit Union, noted that last month's job gains extended beyond healthcare. Retailers, for example, added 22,000 jobs and construction companies 9,000. “America’s hiring recession appears to be over,'' she wrote. "Average job gains in 2025 were an anemic 10,000 a month. So far in 2026, the average is 76,000.''

Simbe Robotics Inc., which deploys five-foot tall robots that scan shelves for out-of-stock items in more than 1,000 stores worldwide, is eager to hire. Co-founder Brad Bogolea started the company with a handful of workers and now has 100, many of them software and artificial intelligence engineers. Simbe has its pick of candidates. Applications more than doubled over the past year, partly because of layoffs elsewhere in the technology industry. Applications for robotics software engineer jobs are up 127% over that time period, Bogolea said.

The jobs data will likely keep the Fed on the sidelines, as it holds its key rate unchanged while evaluating the economic impact of the Iran war. Fed officials are increasingly focused on inflation, which has risen quickly since the war, driven higher by spikes in gasoline prices.

Inflation jumped to 3.3% in March, a two-year high and far above the Fed’s target. The Fed typically keeps its rate unchanged -- or even raises it -- to combat inflation, while it cuts rates to spur more growth and hiring. Early this year many Fed policymakers were worried the job market was stalling and leaned toward rate cuts. But in more recent months hiring has stabilized, undermining the case for cuts.

Friday's jobs report, PNC's Faucher said, “actually makes it less likely that we see a rate cut anytime soon because the Fed can say, ‘The job market is solid. Let’s get inflation back down to 2%. This is not the time to cut rates.’"

____

AP Retail Writer Anne D'Innocenzio in New York and AP Economics Writer Christopher Rugaber in Washington contributed to this story.