U.S. employers added far fewer jobs in April than expected, signaling that the labor market is still reeling from the coronavirus pandemic though not dimming economists’ hopes for a strong recovery.
The Labor Department reported Friday that the economy added 266,000 new jobs last month, far short of economists’ expectations of a gain of 1 million. The unemployment rate rose to 6.1% in April, up from 6% a month earlier as more people returned to the labor force to look actively for work.
In March, employers added 770,000 jobs as the labor market continued its climb out of the depths of the pandemic.
“It turns out it’s easier to put an economy into a coma than wake it up,” Diane Swonk, chief economist for the accounting firm Grant Thornton, said of the disappointing April jobs report.
President Biden noted that the 1.5 million jobs added since he took office are the most for any administration in its first three months. “We knew this wouldn’t be a sprint. It would be a marathon. Quite frankly, we’re moving a lot more rapidly than I thought we would,” he said Friday.
“We’re still digging out of an economic collapse that cost us 22 million jobs,” Biden added.
Economists indicated the April report may be a temporary blip that reflects labor shortages as employers in such industries as hospitality struggle to find workers after shutting down during the pandemic.
Shortages of key materials including semiconductors and lumber have also held back employment in automobile factories, trucking firms, and other businesses.
“With most of the high-frequency indicators still pointing to further improvement and jobless claims falling like a stone in recent weeks … we doubt that [the April report] signals the recovery is at risk,” said Capital Economics senior U.S. economist Michael Pearce.
The labor-force participation rate, or share of people working or seeking work, rose to 61.7% in April, the highest rate since August. “A single report with unexpected weakness in job gains is not a cause for concern,” Ben Herzon, executive director of U.S. economics at IHS Markit, told The New York Times.