Disappointing April Jobs Growth Keeps Unemployment Rate Above 6 Percent

Hiring around the U.S. in April was much weaker than economists expected, with employers adding 266,000 jobs, a Labor Department report showed on Friday. Some forecasters had predicted payroll gains of at least 1 million, pointing to rapid economic growth this year. 

The nation's unemployment rate ticked up to 6.1% from 6% as more Americans sought work. The labor force, defined as the number of people working or looking for work, grew by 430,000 people last month. 

The leisure and hospitality sector added 331,000 jobs, but those gains were offset by losses in temporary help services, transportation and warehousing and the auto sector.

"As shops and restaurants re-opened it looks as if a lot of delivery and temporary help services jobs vanished," Brian Coulton, chief economist at Fitch Ratings, said in a report. "The small rise in the unemployment rate, along with the downward revisions to job gains in March emphasize just how far away we still are from regaining full employment."

As COVID-19 restrictions have faded, some employers have reported difficulty finding workers for open jobs, particularly in lower-paying frontline sectors, such as food service and retail. The need to take care of children or supervise remote schooling is keeping many workers, especially women, on the sidelines, according to experts.

"it is difficult to judge how much weight to put on this report at a time when most of the other evidence suggests economic activity is rebounding quickly, but it is a clear reminder that the recovery in the labor market is lagging the rebound in consumption," economists at Capital Economics said in a note.

Concern that workers are choosing relatively generous unemployment benefits over jobs is leading some states to roll back a $300 weekly federal benefit. Montana this week said it planned to rescind the $300 supplement for unemployed workers next month and instead give bonuses to unemployed workers who start jobs. South Carolina has followed suit.

First published on May 7, 2021 / 8:50 AM

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