U.S. New Jobs Report Comes Below Expectations in April

The United States economy added fewer jobs than expected during April, official government data showed on Friday.

The U.S. Department of Labor monthly report showed that nonfarm payrolls increased by 266,000 jobs last month.

This follows a 770,000 increase in March and compared with market expectations of 978,000 new jobs.

The March reading was revised downwards to 770,000 from 916,000.

The unadjusted reading of new payrolls are estimated to have increased by more than one million jobs last month.

A report by Bloomberg explains that “seasonal adjustments usually call for a large hiring gain in April, which may in part explain why the headline number fell short of forecasts.”

The relatively low numbers raise doubts about the pace of the recovery of the U.S. economy, leading to concerns about how to revive the labor market.

However, it is likely that expectations for the U.S. economy will remain positive, given the high growth rate it achieved during the first quarter of the year, with the gross domestic product (GDP) expanding by 6.4%.

Although the April jobs report is the first since the passing of the $1.9 trillion stimulus package, dubbed the American Rescue Plan, the increased spending is set to provide an incentive for growth.

Further spending through the American jobs plan, which will include spending on new renewable energy and infrastructure megaprojects could contribute to further improvements in the labor market.

On the other hand, the unemployment rate leveled up to 6.1% in April from 6% in previous month.

The increase in the jobless rate resulted from more people rejoining the labor market.

It is worth noting that many Americans have been counted as employed but are absent from their work, as the Coronavirus pandemic resulted in many people permanently losing their jobs.

Furthermore, the Alliance for American Manufacturing has blamed supply chain problems for the loss of 18,000 jobs in the sector, according to a recent report by the New York Times.

The impact also came due to the shortage of semiconductors, which reflected negatively on the automotive industry.

Meanwhile, average weekly hours increased to their highest level on record, rising by 0.7% on a monthly basis to $30.17.

Labor force participation rose to 61.7% in April from 61.5% in March.