U.S. job growth slows but beats expectations amid rising fuel costs

The U.S. economy added 115,000 jobs in April, marking a slowdown from the 178,000 jobs added in March. The figure surpassed economists' expectations, despite a rise in fuel prices due to the ongoing war with Iran. The unemployment rate remained steady at 4.3%, a historically low level, according to the Bureau of Labor Statistics (BLS).

The survey data was collected before the full impact of the oil shock triggered by the Middle East conflict, which began on Feb. 28. The closure of the Strait of Hormuz, a key waterway for global oil transport, has driven up gasoline prices. The average gallon of gas now costs $4.54, up $1.56 since the war started, according to AAA.

The economic slowdown is raising concerns about inflation and higher borrowing costs. The Federal Reserve has kept interest rates steady at 3.5% to 3.75% for three consecutive meetings. Fed Chair Jerome Powell described the economic outlook as "highly uncertain," citing the ongoing Middle East conflict. The Fed previously cut rates three times in 2025.

Markets currently predict a 70% chance that interest rates will remain unchanged for the rest of the year, according to the CME FedWatch Tool. A prolonged oil shortage could further drive up prices for goods like fertilizer and diesel, potentially leading the Fed to hike interest rates to control inflation.