US job growth slows unexpectedly
Execs report difficulty finding workers as Covid uncertainty persists
published : 7 May 2021 at 20:55
writer: Bloomberg News
WASHINGTON: US job growth unexpectedly softened in April from the prior month, suggesting that difficulty attracting workers is slowing momentum in the labour market.
Payrolls increased by 266,000 after a gain of 770,000 in March, according to a Labor Department report Friday that fell far short of projections. Economists in a Bloomberg survey had projected a hiring surge of 1 million positions in April. The unemployment rate edged up to 6.1%, though the labour-force participation rate also increased.
The disappointing payrolls report leaves overall employment more than 8 million short of its pre-pandemic level and is consistent with recent comments from company executives highlighting challenges in filling open positions.
In an interview with Bloomberg Television, Minneapolis Fed President Neel Kashkari said the data justified why the Fed is continuing to deliver stimulus. “Today’s jobs report is just an example that we have a long way to go and let’s not prematurely declare victory,” he said.
While job gains accelerated in leisure and hospitality, employment at temporary-help agencies and in transport and warehousing businesses declined sharply.
Fed Chair Jerome Powell said last week that the contrasting trends could reflect a combination of a skills gap, childcare obligations and lingering virus fears.
Some firms indicate enhanced unemployment benefits and the latest round of pandemic-relief cheques are discouraging some people from returning to work even as job openings approach a record.
On an unadjusted basis, payrolls rose by more than 1 million last month. Seasonal adjustments usually call for a large hiring gain in April, which may in part explain why the headline number fell short of forecasts.
Average hourly earnings rose 0.7% in April from a month earlier, to $30.17. The wage data for April suggest that the rising demand for labour associated with the recovery from the pandemic may have put upward pressure on wages, the Labor Department said.
Average weekly hours increased to match the highest in records dating back to 2006.
Labour force participation, a measure of the percentage of Americans either working or looking for work, rose to 61.7% in April from 61.5%, likely supported by increased vaccinations that helped fuel the reopenings of many retail establishments, restaurants and leisure-related businesses.
Workforce participation for men aged 25 to 54 increased last month, while edging lower for women.