By Sarah Chaney Cambon and Gwynn Guilford
U.S. employers added a modest 266,000 jobs in April, far short
of the 1 million expected among economists, and unemployment rose
The slowdown in hiring signaled a potential slowdown in economic
momentum, at least temporarily, as some businesses struggled to
find workers and faced supply-chain issues.
The deceleration came after payrolls rose a downwardly revised
770,000 in March and an upward revision of 536,000 in February, the
Labor Department said Friday. Unemployment rose from 6% a month
earlier, but more people entered the workforce in April.
Higher vaccination rates, fiscal stimulus and easing business
restrictions are converging to support stronger spending across the
U.S. But many businesses are reporting they can't find enough
workers, a phenomenon that could restrain economic growth in the
The leisure and hospitality sector, including restaurants,
accounted for the bulk of employment creation in April, adding
331,000 jobs. The Labor Department said that reflected an easing of
pandemic-related restrictions in many parts of the country.
Those gains were partly offset by job losses in several other
sectors. Temporary-help employment declined by 111,000 last month,
manufacturing employment was down 18,000 -- predominantly in motor
vehicles where chip shortages idled some factories. Retail jobs
fell by 15,000 and healthcare jobs declined by 4,000.
Signs of labor-market tightness emerged in Friday's report.
Wages for workers rose in April, a sign that some employers were
lifting pay to attract or retain employees. Average hourly earnings
for private-sector employees by 21 cents to $30.17 in April. The
gain is notable because strong hiring in the lower-wage hospitality
sector would typically put downward pressure on average
The average workweek increased to 35 hours in April, an
indication some employers ramped up worker hours to compensate for
the lack of labor.
"Details of the data show signs that the pool of available labor
is extremely tight," Jefferies economists wrote in a note to
clients. "Employers are turning to higher wages to entice workers
off of their couches" and asking current employees to cover
"Outside of the possibility that employers are unable to find
people willing to work to fill positions, the weakness is totally
baffling," the economists wrote. "Nothing in the lead-up to today
suggested that we would see a weak number."
The number of workers on temporary layoff, meaning they expect
to return to their prior jobs within six months, rose slightly in
April, reversing what had been a steady decline in that measure
since surging a year earlier. That could reflect manufacturing
furloughs. The number of people who voluntarily left jobs also rose
for the second-straight month, potentially indicating increasing
confidence among workers that better positions are available.
Gross domestic product, the broadest measure of goods and
services made in the U.S., grew at a 6.4% seasonally adjusted
annual rate in the first quarter. Economists expect households --
many of them vaccinated and with a recent round of stimulus money
-- to further power growth this year by shelling out money on
Businesses are seeking workers to meet the surge in spending.
Job postings on Indeed, a job-search site, were up 24% by the end
of April, compared with February 2020, just before the pandemic
took hold in the U.S.
One year ago, the jobless rate skyrocketed to 14.8% -- a record
for data tracing back to 1948 -- and payrolls dropped by a historic
20.7 million. Business reopenings last summer helped the economy
recoup some of the lost jobs. But the recovery remained incomplete
as Covid-19 continued to spread, triggering continued restrictions
on businesses and heightened caution among many consumers.
Now vaccinations are allowing the U.S. to contain coronavirus
cases, and jobs in sectors with the steepest losses at the onset of
the pandemic are starting to return. The number of small-business
employees punching in at entertainment firms is now 11% higher than
in October 2020, while employment in hospitality, retail and food
services are all up around 2%, according to Homebase, a
Paul Keeler, owner of two barbecue restaurants and a steakhouse
in Arizona, said the businesses are adding workers to meet a
surprising upswing in demand. Sales across the three restaurants
surged by 17% at the start of this year compared with the beginning
of 2019, when he said business was hot.
Many people have traveled to Arizona from nearby states with
tighter restrictions such as California, Oregon and Washington,
helping boost business, Mr. Keeler said. Others are feeling more
confident to dine out because of vaccinations.
"The pent-up demand has been tremendous," Mr. Keeler said.
"Because we've been so busy, we've been interviewing and hiring
Regions that suffered more from the pandemic and imposed greater
restrictions are showing signs of faster rebounds. For example,
Homebase data indicated that small-business employment in Florida
has held relatively steady since October 2020, compared with steep
climbs in New York and California since January. The number of
workers clocking in at New Mexico small businesses is now up nearly
3% from levels seen last autumn.
Heritage Hotels & Resorts has seen a pickup in customer
bookings in the past month as New Mexico eases restrictions, said
Molly Ryckman, the company's vice president of sales and marketing.
Earlier this week, New Mexico officials lifted hotel occupancy
restrictions in counties where Heritage operates several boutique
hotels. Restrictions were relaxed in the other counties in which it
operates a few weeks ago.
Heritage has added hundreds of workers in the last couple of
months, though staffing is still less than half of pre-pandemic
levels. The company currently has 150 open jobs but is struggling
to quickly fill the positions. As a result, it is increasingly
looking at candidates without previous hospitality experience, Ms.
"Especially in a destination like Santa Fe, when you shut down
every museum and every restaurant and all of those are reopening at
the same time, it makes it a challenge to fully staff and reopen,"
Many employers across the U.S. are reporting they can't find
enough workers, even though millions of people are unemployed. This
phenomenon could restrain economic growth in the coming months.
There are several factors keeping potential workers on the
sidelines. Many Americans aren't working for fear of getting or
spreading Covid-19. Businesses are reopening ahead of schools,
leaving some parents without child care. Some people are receiving
more in unemployment benefits than they would earn in the available
Economists are concerned that the labor-force participation
rate, or share of people working or seeking work, will recover
slowly. The rate was at 61.5% in March, down from 63.3% in February
2020 before the pandemic hit.
Mercury Marine, a boat-engine manufacturer based in Fond du Lac,
Wis., is seeing a strong appetite for its products, said Chris
Drees, the manufacturing company's president.
"People have found out boating is an awesome way to social
distance and get away a little bit from the lockdowns," Mr. Drees
said. "We've seen a real boom in the boating industry this last
year, and it looks to continue."
The company plans to add 250 manufacturing employees to its main
campus this year. But Fond du Lac's unemployment rate of about 4%
is well below the national average, meaning there are relatively
few people in the area available to work, Mr. Drees said.
Mercury Marine is ramping up overtime hours so it can make
enough engines as it tries to find more workers. But "if we can't
get those employees, it will certainly hinder our ability to
produce," Mr. Drees said.
Eric Morath contributed to this article.
Write to Sarah Chaney Cambon at email@example.com and Gwynn
Guilford at firstname.lastname@example.org
(END) Dow Jones Newswires
May 07, 2021 09:51 ET (13:51 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.