Under the Biden Administration, the U.S. economy added just 266,000 jobs in Apri and the unemployment rate increased up to 6.1 percent, the Labor Department said in its monthly labor assessment Friday.
This was significantly below expectations. Analysts surveyed by Econoday had predicted Friday’s report would show between 755,000 and 1.25 million workers added to the workforce in April. The median forecast was for 938,000 and an unemployment rate of 5.8 percent.
The disappointing increase for April could be a sign that hiring is being held back by increased unemployment benefits and schools that have not fully reopened, requiring some parents to stay home. Many businesses say that they cannot hire enough workers to fill positions because of the government’s increased unemployment benefits program.
The economy has outperformed expectations on many levels this year as vaccinations have boosted business and consumer confidence. Friday’s employment numbers represent a rare and unexpected 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.
“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 changes, 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. 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.
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.
Those who were unable to work due to their employer closing down declined to 9.2 million, from 11.4 million. Those who reported in April that they were unable to work due to the pandemic, 9.3 percent received at least some pay from their employers for hours not worked.
Among those not in the labor force in April, 2.8 million were prevented from looking for work due to the pandemic. This measure is down from 3.7 million the previous month.