The April jobs report on Friday showed the U.S. economy added 266,000 jobs last month, with the unemployment rate ticking up to 6.1% from 6%.
Economists polled by the Wall Street Journal had expected a gain of one million jobs.
Below are some initial reactions of economists and other analysts, as U.S. stocks
DJIA,
Minneapolis Fed President Neel Kashkari said the weaker-than-expected report validated the Fed’s new policy to base policy moves on actual data and not forecasts.
- Time for a deep breath. One month’s data prove nothing; payrolls could rebound massively in May. But if the April report is indicative of trend which will persist, then the rally in Treasuries after these data makes no sense, because the outcome will be substantially faster wage growth and the potential embedding of the impending reopening spike in margins. Markets right now seem to view the numbers as evidence of a continued deficiency of demand; that seems to us to be the least likely explanation. – Ian Shepherdson, chief economist at Pantheon Macroeconomics.
- “It’s possible that either generous benefits, or a fear of Covid by those not yet fully vaccinated, is making Americans reluctant to jump at the openings available. Two pieces of evidence point that way. Wage rates appear to be climbing sharply in retail and hospitality industries, pointing to a shortage of willing staff as activity climbs with the post-Covid reopening,” said Katherine Judge, senior economist at CIBC Capital Markets.
- “The economy has proven easier to put into a pandemic-induced coma than to awaken. Employers and employees remain skittish after a year of false starts. We need to see a move closer to herd immunity for everyone to feel reassured that when we reopen, we will stay open. A sharp drop in unemployment claims near the end of April suggests that May and June will be much stronger months for employment,” said Diane Swonk, chief economist at Grant Thornton.
- “The reality is that the labor market is tightening and the only thing keeping job gains down is supply, not demand. I think the best way to understand what is happening in the labor market is to watch the 3-month moving average of job gains, which averaged 524,000 workers. That is pretty good, and it will likely get better. The economy is racing forward and that is what we should focus on. And that is likely the way investors will ultimately read the numbers,” said Joel Naroff, president of Naroff Economic Advisors.