The U.S. labor market added 115,000 nonfarm payroll jobs to the economy in April, marking the first time in a year that job gains were posted for two months in a row, according to the Bureau of Labor Statistics.
On the surface, the job market appears to be resilient despite trade wars, actual shooting wars, and concerns about artificial intelligence displacing workers. But Cory Stahle, senior economist at Indeed, says beneath the headlines a more concerning picture emerges.
“There are several different things we need to look at,” he says. “We’re seeing the time it’s taking people to find jobs once they become unemployed has been gradually rising. We’re seeing at a higher level that people are participating less in the labor force and they’re saying, ‘Hey, I’m not even going to bother trying to find a job.’ So that means we’re seeing more people just hitting the sidelines. And then the other real weakness, which kind of looks like a strength, but I think it’s actually a little bit of a weakness, is the concentration that we’ve seen in health care jobs.”
Drilling down on the April jobs report, health care saw the largest job gains with 37,000 jobs added to the economy, followed by transportation and warehousing adding 30,000 jobs. Meanwhile, industries like the federal government, finance, and information saw the biggest job losses.
Health Care Gains Masking Market Instability
Stahle explains that the health care industry has been the dominant source of job growth for years now, largely due to an aging population and the necessity of health care services.
“Health care is something that tends to be pretty steady because it’s something that you need no matter what the economy looks like,” he says. “You can’t necessarily avoid getting mandatory surgery just because the economy is in a recession.”
But placing too much emphasis on growth in this one sector is dangerous because if you take health care out of the equation, the U.S. economy is actually losing more jobs than it is gaining, Stahle says. Data shows that total employment, excluding health care, is down 367,000 since April 2025. In fact, according to a recent report from employment services firm Challenger, Gray, and Christmas, U.S. based employers announced 83,387 job cuts in April, marking the third highest monthly cuts since the end of the Great Recession in 2009.
“At some point, you run the risk that even if health care wants to keep hiring people, [the industry] may not be able to find people, especially with some of the crackdowns we’ve seen on immigration as immigrants play a pretty big role in nursing and in health care.”
Where Job Growth is Shrinking
When looking at the April jobs report, information, finance, federal government, and manufacturing all saw job losses. In the federal government specifically, employment is down by 348,000 since reaching a peak in October 2024. (It’s important to note that workers who were technically furloughed during the partial government shutdown were still counted as employed.)
Since the start of the year, employers have announced a total of 300,749 job cuts, with Challenger, Gray, and Christmas pointing out that technology companies continue to lead all industries in layoffs and large-scale cuts largely due to AI investments.
While AI is certainly replacing some roles and causing companies to put a halt on expansion, Stahle says he wants to make it clear that doesn’t mean AI is completely wiping out all jobs. In many cases, companies are reallocating resources from one department to the next to increase their investments in how they use the technology to complement jobs. “It doesn’t necessarily mean they’re putting robots in people’s chairs and that people are losing their jobs. What we’ve seen being the case with a lot of companies is that they’re saying,`We are going to cut spending or cut labor costs in this area of our business so we can take that money and put it towards AI.’”
Instability Impacting new Grads
While the weak spots in today’s job market are impacting all generations, Stahle points out that recent grads are being hit hard by a lack of hiring.
“We’ve seen that white collar jobs outside of the doctor jobs and [positions] in health care have really pulled back and that means that all these graduates who are coming out of college now are trying to get in and they’re not able to find jobs,” he says.
The current unemployment rate for recent college graduates between ages 22-27 currently sits at 5.6%, higher than the overall unemployment rate of 4.3%. This disparity, Stahle says, is “not something that throughout history has been true that often.”
For job seekers looking for employment today, regardless of age, Stahle says he wants to highlight that “we live in a market economy with business cycles where things that go down tend to come up.”
“So as job seekers are thinking about their careers,” he says, “they should be thinking much more in terms of decades rather than in terms of years.” This way, you remain adaptable to changing and switching industries if the job market calls for it.
