Economy adds 266K jobs in April, far below expectations
The U.S. economy added 266,000 jobs in April and the unemployment rate rose to 6.1 percent, an unexpectedly poor showing falling well below expectations.
The meager showing exposed unexpected gaps in a recovery that some economists were fretting would “overheat” by recovering too quickly.
“For those who feared the US economy would overheat, the bigger risk may be that it is undercooked,” said The Atlantic Council’s Josh Lipsky.
“Today’s report shows there won’t be an overnight fix for millions who remain unemployed. The U.S. economy still has a long way to go in its recovery.”
Economists were expecting roughly a million new jobs in the April report and a drop in the unemployment rate. Some firms had projected increases as high as 1.3 million.
Even March’s blockbuster figure was revised downward by some 16 percent, to 770,000 from 916,000.
The unemployment rate remained significantly elevated among some racial minorities, coming in at 9.7 percent for Blacks and 7.9 percent for Hispanics, compared to 5.7 percent for Asians and 5.3 percent for Whites.
On a net basis, the entirety of the April’s job growth could be attributed to gains in the recovering leisure and hospitality sector, which added 330,000 jobs, 187,000 of which were from restaurants and bars reopening and expanding capacity.
That increase was offset by losses in other sectors such as temporary business help, which bled 110,000; courier and messengers jobs, which fell 77,000; manufacturing, which lost 18,000 jobs; and retail, which lost 15,300 jobs.
The Labor Department report released Friday represents the first month of the second quarter, when economists expected to see some of the highest growth rates in decades.
The slowdown in job growth took place even as the $1.9 trillion COVID-19 relief bill President Biden signed in March began working its way through the economy, including expanded unemployment benefits and $1,400 stimulus checks.
Vaccination rates peaked in April, bringing down daily case counts of the deadly disease, as well as hospitalizations and deaths.
Democrats said the showing was proof that the economy needed a bigger push, pointing to the $4 trillion infrastructure and family support plans that Biden has proposed.
“Ask me again why we need the American Jobs and Families Plans,” said Zac Petkanas, a senior adviser for Invest in America, a group advocating for major infrastructure investments.
Republicans, on the other hand, said the slowing jobs growth was a sign that Biden’s economic approach was not working.
“This is the direct effect of the Biden administration paying people more NOT to work,” the Republican Study Committee, a conservative House caucus, tweeted.
“@POTUS’s determination to spend more than any other President in history will continue to crush our economy.”
This is the direct effect of the Biden administration paying people more NOT to work.@POTUS’s determination to spend more than any other President in history will continue to crush our economy. https://t.co/7MZbEDuXLY
— RSC (@RepublicanStudy) May 7, 2021
Mike Fratantoni, chief economist at the Mortgage Bankers Association, pointed to reports of supply chain challenges and labor shortages as part of the problem.
“We continue to expect robust job growth and housing demand through the remainder of the year, but this report suggests that the rate of improvement in the job market is going to be much less consistent than other indicators would suggest,” he said.
Updated at 11:27 a.m.