Employers added 266,000 jobs in April, including 4,100 jobs in accounting and bookkeeping services, the U.S. Bureau of Labor Statistics reported Friday, but the unemployment rate nonetheless ticked up one-tenth of a percentage point to 6.1 percent.
The main job gains came in the leisure and hospitality sector, other services, and local government education, but those were partially offset by losses in temporary help services and among couriers and messengers. Within professional and business services, employment in temporary help services fell by 111,000 in April and is 296,000 lower than in February 2020.
The hiring figures fell far below analyst expectations, and the number of unemployed people, at 9.8 million, showed little change last month. Still, these unemployment figures are far lower than a year ago, although they’re far above their levels prior to the COVID-19 pandemic, when the unemployment rate was 3.5 percent and 5.7 million people were unemployed.
The numbers may be out of whack because of seasonal volatility issues as the economy continues to recover during the ongoing pandemic and seem to contradict some of the other economic reports coming out of the Labor Department and its Bureau of Labor Statistics.
“I think the number was a rather large disappointment,” said Phil Noftsinger, executive vice president of CBIZ, a Top 100 Firm. “I would caution against overreacting to this particular report, because it’s a bit out of step with the other macro data in the context of continuing claims and new jobless claims that we’ve seen throughout the month of April. Even the week that the sampling was done for the report was done in a week that we had a relatively good new jobless claims report. It’s interesting. One of the things that happened post the great financial crisis in 2009 is that the non-farm payroll numbers and a lot of the Labor Department numbers got a little bit volatile as typical seasonality application mathematics just didn’t work as well as they used to, simply because of the volatility. We should expect that to happen here. It should not be a surprise that the most shocking result came almost exactly one year after the steep dropoff that we experienced last year.”
CBIZ released its own
“In our CBIZ Small Business Employment Index, although it broke in the other direction and caused the number to be more positive, I could see our seasonal mathematics playing into that number, given the sharp decline from last year,” said Noftsinger. “I don’t know that the math works perfectly in these times of high volatility, so I think we should caution ourselves a little bit.”
The CBIZ report found the most hiring growth in the Northeast at 5.94 percent, the West at 3.97 percent and the Central region at 3.3 percent, with a more moderate increase in the Southeast at 2.5 percent. The arts and entertainment industry accounted for the most growth, followed by agriculture, accommodation and food services, transportation, and construction. But some industries experienced hiring decreases, including real estate and utilities.
“In our data we saw strong gains in arts and entertainment, and accommodation and food services,” said Noftsinger. “The professional and business services sector was mildly positive, so from an accounting perspective we’re still seeing job gains in that area, but not as strong as arts and entertainment, and accommodation and food services, which have been closed primarily and are now reopening. The number on its face is shocking, and I think it will send some ripples, but I would expect us to enter a period of higher volatility right now, just given that you’re lapping a really disruptive period from last year.”
The Democratic and Republican leaders of the tax-writing House Ways and Means Committee had contrasting reactions to the jobs report. “The labor market is still very much healing, and while this month’s jobs report is disappointing, this week, we saw the lowest level of unemployment claims since the pandemic began,” said committee chairman Rep. Richard Neal, D-Massachusetts. “We have momentum behind us, but it is clear that Americans are still struggling and in need of sustained support. There is a lot of ground to make up to return to pre-pandemic levels of employment and to address the real concerns Americans have about returning to work. Millions of workers are still weighing if they can even afford child care or caregiving if they return to work, and we know this is disproportionately keeping women from re-entering the workforce.”
His Republican counterpart took a darker view of the report. “This is a stunning economic setback, and unequivocal proof that President Biden is sabotaging our jobs recovery with promises of higher taxes and regulation on local businesses that discourage hiring and drive jobs overseas,” said Rep. Kevin Brady, R-Texas. “The White House is also in denial that many businesses — both small and large — can’t find the workers they need, because Democrats are paying 4 in 10 jobless more to stay home than to return to work. Just this week, Montana and South Carolina made the unprecedented move to opt out of federal unemployment programs, because the benefits are discouraging work and holding back their recovery. More states are expected to follow. Even though President Biden inherited a strong economic recovery, it’s clear his job-killing policies are hurting working families and Main Street businesses.”
Senate Finance Committee chair Ron Wyden, D-Oregon, criticized the move by some states to opt out of federal unemployment programs. “A deeply disturbing trend is emerging with Republican governors cutting off enhanced jobless benefits months early, and Republican interest groups pushing the move,” Wyden said in a statement Friday. “Enhanced jobless benefits helped save the economy by ensuring millions of families could pay rent and buy groceries during this crisis. Cutting off all benefits while millions of workers have not yet been able to return to work could cause tremendous financial pain and sabotage our economic recovery. Study after study has shown that enhanced jobless benefits have not prevented workers from returning to their jobs, and there are other factors at play here, like lack of child care for millions of women and ongoing concern about the virus. It’s critically important that these conversations include mothers without child care and other jobless workers, not just business owners paying starvation wages. Tackling challenges like child care, rather than scapegoating workers, is going to boost our economic recovery.”
