Today, I give you the latest on job growth in the U.S.
The BLS reported today that 266,000 jobs were added last month. Now that might not sound bad, but considering economists were expecting one million new jobs, it’s downright depressing. If that wasn’t bad enough, March’s employment gain was revised down from 916,000 to 770,000. The unemployment rate ticked up to 6.1%, from 6.0% in March.
How did the economists get it so wrong?
The following were all pointing to a huge number today:
- Over 250 million COVID-19 vaccinations already given in the US, leading to a big increase in business reopenings
- Initial jobless claims posted a huge decline last week
- A massive increase in consumer spending in the first quarter fueled by stimulus payments
- The ADP payroll survey showed a 742,000 employment gain in April
So, what happened? It seems to me they forgot that we have a labor shortage right now. Job openings have become harder to fill, especially since expanded unemployment benefits make it beneficial for many to stay home. The fear of getting COVID-19 and the lack of available childcare are also reasons many have yet to reenter the workforce.
Even after increasing wages, and with millions of unemployed people out there, many employers say it is increasingly difficult to fill open positions.
This should change over time as schools fully reopen, wages keep rising, and federal benefits expire. In the meantime, expect some volatility in the employment data, even as COVID-19 becomes increasingly contained.