US Unemployment Remains Low, Hopes for Interest Rate Cuts Grow Slimmer

JAKARTA, KOMPAS.com - The US labour market continues to show resilience in April 2026. The number of new jobs added surpassed analysts’ expectations, while the unemployment rate remained low.

This data strengthens the market’s view that the US Federal Reserve will not lower interest rates in the near term.

The US Bureau of Labour Statistics reported that nonfarm payrolls increased by 115,000 positions in April 2026.

This figure is higher than the projection from economists surveyed by Reuters, which anticipated 62,000 new jobs.

The unemployment rate remained at 4.3 per cent.

Economists’ prior projections varied widely, from a loss of 15,000 jobs to an addition of 150,000 positions. This spread reflects the high uncertainty in the current US economic conditions.

Analysts assess that the impact of the US and Israel war against Iran has not yet fully reflected in the employment data.

The conflict has triggered rises in petrol, diesel, and various other commodity prices due to disruptions in energy distribution through the Strait of Hormuz.

The US labour market has also been deemed increasingly difficult to read since mid-2025.

The number of hires fluctuates up and down from month to month. Economists link this to major changes in the structure of business and the workforce in the US.

Several analysts have highlighted issues with the US government’s “birth-death” model. This model is used to estimate new jobs from newly established companies and job losses from business closures.

The accelerating pace of company turnover makes estimating job creation more challenging.

Weather factors, labour strikes, government sector layoffs, and President Donald Trump’s policies tightening illegal immigration also contribute to the volatility in employment data.

Economists now more frequently examine three-month moving averages rather than single monthly data to gauge the direction of the labour market.

The US labour market is also considered to be in a state that economists call “slow hiring, slow firing”.

Companies are not aggressively recruiting new workers, but there have not been many layoffs either.

This situation is driven by uncertainties in trade and immigration policies.