The April Jobs Report released on Friday by the US Dept. of Labor shocked many economists who after the March numbers of 916,000 non farm jobs expected 1.2 million or more in a trajectory that was only up, or a blockbuster to say that America was back on track, but now are singing songs of lamentation with an abysmal 266,00 jobs, one that also sent the markets reeling.
Some of the news was anticipated by Wednesday’s ADP jobs report, a culmination of private jobs that while often yards away from Labor’s figures, showed some increases, notably in large business with a 277,000 increases, but otherwise offered a modest picture.
March was also revised downwards to 770,000 leaving no joy, but some serious head shaking in the halls of academia, as well as on Capitol Hill. It also forced the Biden administration to admit that the slog ahead was indeed much longer than they anticipated, and that their jobs plan was needed now, more than ever.
A wide variety of economists made rosey forecasts for April including Jeffereies who came in with one of 2.1 million jobs, and as CNBC noted was “by far the highest estimate on Wall Street.”
When asked, about the moribund report, President Biden told reporters that the “climb is steep, and we’ve got a long way to go,” and “we are still digging our way out of a very deep hole."
Grant Thornton’s chief economist Diane Swonk, perhaps said it best when she told The New York Times, “It turns out, it’s easier to put an economy into a coma than wake it up.”
Even a 1.2 million increase would leave employment 7.3 million short, said Capital senior U.S. economist Michael Pearce in his interview with CNBC on Wednesday.
A wide variety of economists made rosey forecasts for April including Jeffereies who came in with one of 2.1 million jobs, and as CNBC noted is “by far the highest estimate on Wall Street.”
Ben Herzon, executive director of U.S. economics at the financial services company IHS Markit, was sanguine, when he said, “A single report with unexpected weakness in job gains is not a cause for concern.”
Some welcome news on Thursday, was the decrease of unemployment benefits to those applying for them. Those figures showed 505,000 people filing for state programs, falling for the last four straight weeks, after peaking at six million last spring, according to the Times.
That acceleration showed mostly in April in the fields of leisure and hospitality that came close to the private employers in the earlier ADP report of 237,000, with the Labor Dept. giving a strong figure of 300,000.
In keeping with these strong figures the increase among Americans getting vaccinated to the tune of 30% also gave a shot in the arm to the numbers, along with a corresponding increase in more business’s reopening.
There was a side note that these restaurant employers were finding it hard to attract and retain skilled workers. This has been a steady issue, and the void has been attributable, say some, to extended unemployment benefits, and stimulus checks from the Biden administration.
To no one’s surprise this has come from Republican critics of Biden efforts, and state leadership in red states, bending an old trope that offering even a mild increase in state unemployment benefits is a disincentive to look for earned labor.
There is no evidence to support this assertion, and others attribute it to a cushion that allows many restaurant workers to look for better paying, more stable jobs, without the low wages, grubbing for tips, and the physical drain of a fast paced job, where workers are on their feet for hours.
The Institute for Supply Management, added that “finding and retaining labor, skilled and unskilled is highly challenging and frustrating,” and that “as the challenges continue, we are not accepting all the work that we could if we had the labor."
For women workers, especially those with children the partial openings of in person learning, especially on the elementary level, affects their ability to take work, and with the addition of meal preparation and assisting with remote learning is a real drain.
It also might be one reason while labor force participation increased from 61.4 percent to 61.7.
Treasury Secretary Janet Yellen echoed the president, by saying, in her remarks to the Times, that “although she was expecting to see more substantial job growth last month, the labor market was stronger than the headline numbers suggested. She pointed to an increase in hours worked by employees and a decline in workers who are involuntarily working part-time for economic reasons.”
The United States, while still a wealthy country faces, as does it counterparts across the globe, the real problem of recovery: jobs that may never come back, consumer hesitancy, and change in taste, leading to, as Adam Posen said to Bloomberg News, “transitionally more unemployment” adding, “there’s no good government fix for that “
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