The American jobs engine slowed significantly last month, confounding optimistic forecasts of the pace of recovery and sharpening debates over how to best revive a labor market severely weakened by the coronavirus pandemic.
The government reported Friday that employers added 266,000 jobs in April, far less than the robust gains seen in March. As more people returned to work, the unemployment rate rose slightly to 6.1 percent.
“It turns out that it’s easier to put an economy to sleep than it is to wake it up,” said Diane Swonk, chief economist at accounting firm Grant Thornton, of the disappointing report. “It’s understandable; it will take some time; you won’t be able to simply snap your fingers and get everyone back to work.
Economists predicted an increase of about a million jobs. The March increase was revised down to 770,000 from 916,000. The Alliance for American Manufacturing blamed supply chain issues for the loss of 18,000 jobs in that sector, highlighting the impact of a semiconductor shortage on the automotive industry in particular.
Many offices are still not fully operational. “I just think it takes a while for businesses to figure out how many people they need,” Ms. Swonk said, noting that employers and workers are still cautious. “I don’t find this particularly troubling or distressing.” Ben Herzon, executive director of US economics at financial services firm IHS Markit, concurred. “A single report showing unexpected weakness in job gains is not cause for concern,” he explained. “Demand is increasing, and activity is increasing.”
He noted that labor-force participation had increased for the second month in a row, rising to 61.7 percent in March from 61.4 percent in February.
More opportunities are emerging as coronavirus infections subside, vaccinations become more widely available, restrictions are lifted, and businesses reopen. The number of job postings on the online job site Indeed has increased by 24% since February of last year. “There’s been a broad-based pickup in demand,” said Nick Bunker, who leads North American economic research at the Indeed Hiring Lab. Construction workers are in high demand as a result of the booming housing market. Loading, stocking, and other warehousing jobs are also plentiful as a result of the e-commerce boom.
The economy still has a long way to go before it can return to pre-pandemic levels. Since February 2020, millions of jobs have been lost, and the labor force has shrunk. As the economy slowly recovers, there are conflicting views on what is happening in the labor market. Employers, particularly those in the restaurant and hospitality industries, have reported a low response rate to job postings. Several people have blamed overly generous government jobless benefits, such as a $300-per-week federal stipend provided as part of an emergency pandemic relief program.
However, there are other factors impeding a return to work. Millions of Americans have stated that they have been unable to return to work due to health concerns and child care responsibilities, with many schools and day care centers still not operating normally. Millions of others are considered on temporary layoff and expect to be hired back by their previous employers once more businesses reopen fully. At the same time, some baby boomers have retired or reduced their work hours.