US Payrolls Beat Forecasts as Fed Pause Bets Build
Friday 8th May 2026 – 14:14 (BST)
The US economy added 115,000 jobs in April, comfortably above consensus expectations of 62,000 and continuing a run of resilient labour market data. The unemployment rate held steady at 4.3%, while March’s payrolls figure was revised higher to 185,000 from 178,000, marking the first back-to-back monthly gains in close to a year.
Sector-level detail showed hiring concentrated in health care, which added 37,000 jobs, alongside 30,000 in transportation and warehousing and 22,000 in retail trade. Federal government employment continued to contract, falling by a further 9,000, with information services and manufacturing also losing ground. Average hourly earnings rose 0.3% on the month and 3.8% on the year, a touch firmer than expectations and notably above the 3.5% annual pace recorded in March.
The release follows Wednesday’s ADP private payrolls report, which showed a smaller-than-feared 109,000 gain in April and offered an early signal that hiring momentum was holding up better than market positioning had assumed. Together, the two reports point to a labour market that is cooling gradually rather than rolling over, leaving Federal Reserve policymakers with little fresh ammunition to justify near-term rate cuts.
What it means for GBP/USD
For currency markets, the print bolsters the case for the Federal Reserve to hold rates at its June meeting and has reduced the probability of a cut before the autumn. The dollar firmed in the immediate aftermath, with GBP/USD slipping back below 1.36, having traded above this key level of support ahead of the data. Sterling now finds itself caught between a more hawkish Fed outlook and a Bank of England that paused earlier this month, leaving the pair vulnerable to further dollar strength if next week’s US inflation data also surprise to the upside.