US economy adds just 266,000 jobs in April, significantly less than predicted

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Andrew Feinberg

White House Correspondent

The United States economy added just 266,000 jobs in April, the government reported on Friday, a disappointing month of growth given economists predicted a far greater return to the labour force.

Prior to the release of the report, economists expected job creation to be around 1 million for the next couple of months as the economy booms and more people receive a Covid-19 vaccine – indicating the country was recovering from the pandemic. Unemployment rates were also estimated to drop from the 6 per cent recorded in March to about 5.8 per cent.

Instead, the unemployment rate slightly rose to 6.1 per cent in April. Experts have cautioned this number could be misleadingly low, though, given the number of people who dropped out of the labour force in the last year and have yet to return.

April was the most disappointing month in job growth since January after the US economy added 770,000 jobs in March.

Although the jobs report was more disappointing than economists predicted, the US economy was still moving in the right direction by adding jobs into the labour force after more than 20 million were lost at the start of the pandemic. But the rate was slower than needed if the country wanted to make a speedy recovery.

The US has regained about 63 per cent of the jobs lost during the pandemic, but there were still an estimated 8.3 million jobs to go.

At this current rate, the US would not return to its pre-pandemic job rate until November 2023.

Some businesses and employers have complained to lawmakers and the White House that they were struggling to fill lower-wage, hourly positions as more industries reopen amid the pandemic. But it was not yet known if these labour shortages were due to short-term issues of Covid-19 still infecting communities, or if it was a longer-term problem.

Lower-income earners, women, and Hispanic and Black workers made up the largest chunk of pandemic layoffs, and millions were still out of work.

Senate minority leader Mitch McConnell and other Republican politicians have argued that the $1.9 trillion American Rescue Plan, which passed through Congress without a single GOP senator’s support, was to blame for some Americans not returning to work amid the pandemic. Included in the package were stimulus checks and increased unemployment benefits.

But the Biden administration has argued the US economy would be returning at an even slower rate than recorded if it weren’t for the stimulus boost.

President Joe Biden was anticipated to speak from the White House later on Friday to address the disappointing jobs report.

In the speech, the president may use the opportunity to further push his $2.3 trillion American Jobs Plan to the public because, his administration argues, it would add more jobs to the US economy and bring workers back to the labour force.