U.S. job growth unexpectedly softened in April from the prior month as employers found it difficult to attract workers, a development that’s holding back momentum in the labor market.
Payrolls increased 266,000 after a downwardly revised 770,000 March increase, according to a Labor Department report Friday that fell well short of projections. Economists in a Bloomberg survey projected a 1 million hiring surge in April. The unemployment rate edged up to 6.1%.
Treasury yields plunged, while inflation expectations spiraled downward and dollar turned sharply lower. U.S. stock futures maintained gains.
The disappointing payrolls print leaves overall employment well short of its pre-pandemic level and is consistent with recent comments from company officials highlighting challenges in filling open positions. While job gains accelerated in leisure and hospitality, employment at temporary-help agencies and transportation and warehousing declined sharply.
Federal Reserve Chair Jerome Powell said last week the dichotomy likely reflects a combination of a skills gap, child care obligations and lingering virus fears. Some firms indicate enhanced unemployment benefits and the latest round of pandemic-relief checks are discouraging a return to work.
Some firms indicate enhanced unemployment benefits and the latest round of pandemic-relief checks are discouraging a return to work even as job openings approach a record.
The dearth of job candidates has led some states to swing into action to alleviate the labor shortage. Montana is trying to lure people back into the workforce with a $1,200 payment if they stop collecting unemployment benefits and work for at least four weeks. South Carolina plans to terminate all federal and pandemic-related jobless programs at the end of June.