Summary
- The US economy added 266,000 jobs last month against market expectations of addition of nearly a million workers.
- However, the jobless claims numbers released last week reflected that the US labor market is roaring back.
- President Joe Biden believes that the latest job numbers underscore the actions being taken by the US government.
Against widespread forecasts of the US economy adding about 1 million jobs in April 2021, the latest employment report released by the Labor Department showed that the economy added a disappointing 266,000 jobs last month.
The report came as a surprise for investors as the US dollar turned sharply lower and Treasury yields plummeted. However, the US shares rose on expectations that the central bank’s monetary policy will stay conducive to economic growth for a prolonged period.
Must Read: US Markets End Higher After April Jobs Data
The highly anticipated report was likely to show an addition of nearly a million workers in April as the US employers rush to meet an uptick in labor demand, freed by the reopening of the economy. Experts were hopeful that widespread vaccinations that have prompted Americans to take vacations, dine out, and venture out to shops and stores after months of restrictions would result in significant job gains. However, the latest jobs report tells a different story.
Employment Statistics – April 2021
As per the US Bureau of Labor Statistics, the unemployment rate rose slightly from 6 per cent to 6.1 per cent, and the number of unemployed persons stood at 9.8 million last month.
While these measures were significantly down from their recent highs in April 2020, they prevail well above their levels seen prior to the COVID-19 pandemic. In April 2020, the unemployment rate reached a historic peak of 14.8 per cent, which reflects its highest level since the Great Depression.
Also Read: US GDP Grows By 6.4% In First Quarter As Economy Reopens
The labor force participation rate also changed a little to 61.7 per cent in April, which is about 1.6 percentage points less than in February 2020. Moreover, the employment-population ratio stood at 57.9 per cent, higher by 0.5 percentage point since December 2020 but 3.2 percentage points below the February 2020 level.
While these employment statistics fell short of expectations, the jobless claims numbers released last week reflected that the US labor market is roaring back. The worker filings for jobless claims in the US reached a new low to 498,000 last week for the first time since the COVID-19 pandemic took hold as hiring accelerates and layoffs ease.
Related Read: US Adds 916,000 Jobs in March; Jobless Rate Down 6%
What do Latest Job Numbers Signify?
It seems that the US labor market is restrained by labor shortages that have left businesses struggling to meet the booming demand for workers. The market continues to see increased demand as the US economy reopens amid rapidly increasing public health and huge financial help from the government.
While the labor market remains buoyed by very accommodative monetary and fiscal policy, it is hard to neglect that millions of Americans have permanently lost jobs due to the pandemic and remain out of work. It appears there is still some time for these people to regain confidence and get back into the labor force.
President Joe Biden also reacted to the latest employment numbers, stating that the economy has a “long way to go” before reviving from the coronavirus pandemic slump. According to him, the April employment report underscores the actions being taken by the US government.
Looking forward, a road to full employment appears to be bumpy, with a long way ahead for the nation before it achieves full economic recovery. The accelerated pace of COVID-19 vaccinations and the gradual return of normalcy in businesses are expected to fuel the labor market revival in the months ahead.
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