Shocking Miss: The U.S. Economy Added Just 266,000 Jobs in April, Unemployment Ticks Up

US President Joe Biden speaks on the American Jobs Plan, following a tour of Tidewater Community College in Norfolk, Virginia on May 3, 2021. (MANDEL NGAN/AFP via Getty Images)
MANDEL NGAN/AFP via Getty Images

The U.S. economy added just 266,000  jobs in April and the unemployment rate ticked up to 6.1 percent, the Labor Department said in its monthly labor assessment Friday.

This was far below expectations. Analysts surveyed by Econoday had predicted Friday’s report would show between 755,000 and 1.25 million workers added to payrolls in April. The median forecast was for 938,000 and an unemployment rate of 5.8 percent.

The disappointing number for April could be a sign that hiring is being held back by enhanced unemployment benefits and schools that have not reopened full time, requiring some parents to stay home to take care of children. Many businesses say that they cannot hire enough workers to fill positions because of the government’s enhanced unemployment benefits program.

The economy has outperformed expectations on many metrics this year as vaccinations have boosted business and consumer confidence and restrictions on businesses have been lifted. Friday’s employment numbers represent a rare miss.

In April, average hourly earnings increased by 21 cents to $30.17, a 0.7 percent increase, following a decline of 4 cents in the prior month. Average hourly earnings for private-sector production and nonsupervisory employees rose by 20 cents to $25.45.

“The data for April suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages,” the Department of Labor said.

The jobs number for February was revised up by 68,000, from 468,000 to 536,000. March was revised down by 146,000, from 916,000 to 770,000. With these revisions, employment in February and March combined is 78,000 lower than previously reported.

Leisure and hospitality added 331,000, including 187,000 jobs in restaurants and bars. Those figures are lower than what many analysts expected given that many states and cities lifted or eased restrictions on dining and drinking businesses in April.

Construction was flat for the month, a surprising result given the strength of the housing market.

Manufacturing shed 18,000 jobs, led down by automaker employment declining by 27,000. Wood product producers shed 7,000 jobs, perhaps reflecting extremely high prices for lumber.

The messenger and courier business shed 77,000 jobs in April, making it one of the biggest declining categories. The reason for that is not at all clear.

Employment at food and beverage stores fell by 49,400. Gas station employment fell by 8,900.

The temporary administrative help services sector contracted by 111,000 jobs in April.

The private sector overall added 218,000 jobs and governments added 48,000.

The labor force participation rate climbed to 61.7 percent, up two-tenths of a percentage point from March.

In April, 18.3 percent of workers performed their jobs remotely because of the coronavirus pandemic, down from 21.0 percent in the prior month.

The number of people saying they had been unable to work because their employer closed or lost business due to the pandemic declined to 9.2 million, from 11.4 million in the previous month. Among those who reported in April that  they were unable to work because of pandemic-related closures or lost business, 9.3 percent received at least some pay from their employer for the hours not worked, little changed
from the previous month.

Among those not in the labor force in April, 2.8 million persons were prevented from looking for work due to the pandemic. This measure is down from 3.7 million the month before.

 

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