The April jobs report shocks as 266,000 payroll additions badly miss the forecast of 1 million
- The US
economyadded 266,000 jobs in April, a huge miss of the median estimate of 1 million.
- The unemployment rate rose to 6.1% from 6%, while economists had expected it to drop to 5.8%.
- The payrolls increase marks a fourth straight monthly gain but the smallest since January.
The country's count of
Businesses across the manufacturing and service sectors reported difficulties in finding workers throughout April. While experts have suggested such shortages are only temporary, the Friday report seems to support such claims.
Also, March's gain was significantly revised downward to 770,000 from 916,000, further eroding the recently bullish outlook toward the
The unemployment rate rose to 6.1% from 6%. That missed the forecast for a decline to 5.8%.
The U-6 unemployment rate - which includes Americans marginally attached to the labor force or those working part-time for economic reasons - dropped to 9.9% from 10.9%. The labor-force participation rate climbed to 61.7% from 61.5%, signaling more Americans started looking for work.
The US is still down roughly 9.8 million jobs from its pre-pandemic peak. The relaxing of lockdown measures is expected to power a few more months of healthy growth, but April's huge payrolls miss raises concerns around just how easy future gains will be.
"For those who feared the US economy would overheat, the bigger risk may be that it is undercooked," Josh Lipsky, the director of the Atlantic Council's GeoEconomics Center, said. "The Federal Reserve's policy of near-zero interest rates and Congress' push for more fiscal spending will continue in the months ahead. For the rest of the world, it means they can't rely solely on the US to power a global economic recovery in 2021."
Detailing the COVID-era labor market
The government's monthly payrolls data gives the most in-depth look at how businesses are preparing for a new sense of normal, as well as how the pandemic changed the way Americans work.
Roughly 2.8 million Americans cited the health crisis as the main reason they didn't seek employment in April, according to the report. That compares to 3.7 million people in March.
Approximately 2.1 million people said their unemployment was temporary, up from 2 million in March. That compares with the pandemic-era peak of 18 million temporarily laid-off Americans and the precrisis low of about 700,000.
About 9.4 million people said the coronavirus was the primary reason their employer ended operations in April. That's down from 11.4 million.
Also, about 18.3% of working Americans said they worked remotely in April because of the pandemic and related restrictions, down from 21% the month prior.
Not all doom and gloom
Though the Friday report was a major disappointment, other measures of the labor market and broad economic activity have shown signs of improvement.
US gross domestic product grew at an annualized rate of 6.4% in the first quarter. The reading marked the second-strongest expansion since 2003, exceeded only by record-breaking growth in the third quarter of 2020. The country has now reversed about 96% of its pandemic-era decline in output, opening the door for GDP to fully recover in the second quarter.
Elsewhere in labor-market data, weekly jobless claims fell below 500,000 for the first time since the pandemic drove outsize layoffs in March 2020. The early May decline suggests strong hiring continued through the spring as warmer weather and strong consumer demand augmented job creation.
Data tracking the country's battle against the virus is similarly encouraging. Daily COVID-19 cases steadily declined through April and into May, according to The New York Times. The seven-day average for new daily cases now sits at roughly 46,600, the lowest level since early October.
Vaccination has slowed somewhat from its mid-April peak but remains above a daily average of 2 million doses. The current pace still places the US on track to reach herd immunity in four months, but that period has grown longer and some experts warn that booster shots might be necessary to keep the virus at bay for years to come.
President Joe Biden pushed Americans to get vaccinated on Tuesday. The White House announced a new goal of at least partially vaccinating 70% of US adults by July 4. That equates to administering another 100 million shots over the next two months, a target that could easily be reached if vaccinations hold at 2 million a day.
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