U.S. Payroll Growth Signals Stronger Economy, Shifting Fed Rate Cut Outlook

The U.S. economy demonstrated robust strength in April 2025 with nonfarm payroll employment soaring by 177,000, defying expectations. This unexpected surge in jobs and a stable unemployment rate at 4.2% has led to adjustments in market forecasts for the Federal Reserve’s interest rate cuts. The increase in payroll data triggered traders to reduce their bets on rate cuts, resulting in rising U.S. Treasury yields.