U.S. sees weaker-than-expected job growth as labor market recovery slows

WASHINGTON, May 7 (Xinhua) -- U.S. employers added 266,000 jobs in April, with the unemployment rate hardly changed, indicating new signs of a stalling labor market recovery, the Labor Department reported on Friday.

The job growth in the United States in March was reduced by 146,000 to 770,000, while the figure for February was up by 68,000 to 536,000, according to the monthly employment report.

The unemployment rate of 6.1 percent changed little in April as compared with that of last month, which remained well above the pre-pandemic level of 3.5 percent.

The labor force participation rate was 61.7 percent in April, which is slightly up from that of 61.5 percent in March, and is still 1.6 percentage points lower than that of February last year.

The number of the employed in April is far fewer than the Dow Jones estimates of one million new jobs, and some economists had expected an even stronger growth.

"With all the fiscal stimulus and loosening of state restrictions, it should have translated into stronger hiring in April," Ryan Sweet, a senior director at Moody's Analytics, wrote in an analysis.

Though job gains were notable in leisure and hospitality, other services, and local government education, they were partially offset by employment declines in temporary help services, as well as couriers and messengers, according to the monthly report released by the Labor Department's Bureau of Labor Statistics.

Sarah House and Shannon Seery, economists at Wells Fargo Securities, said that they suspected the "weakness is primarily attributable to shortages of both labor and physical inputs, limiting activity and thereby hiring."

Sweet said the labor supply issue can probably be attributed to several factors "unique" to this recovery, including lingering concerns about the pandemic, childcare issues, and the policy response, adding that the expansion of unemployment insurance benefits may also be a factor in limiting the supply of labor.

In a statement, U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley called for ending the extra 300-dollar weekly unemployment benefit provided by the federal government, arguing that the "disappointing" jobs report makes it clear that "paying people not to work is dampening what should be a stronger jobs market."

The extra unemployment benefits of 300 dollars per week have been extended through September, as part of the 1.9-trillion-dollar COVID-19 relief plan approved in March.

Montana Governor Greg Gianforte and South Carolina Governor Henry McMaster have announced earlier this week that their states will stop participating in the 300-dollar expanded unemployment benefits, citing worker shortages.

U.S. Treasury Secretary Janet Yellen, however, refuted these arguments. At a White House press briefing Friday, she said caregiving responsibilities and absence of childcare, as well as concerns about the pandemic and the health consequences, are still important reasons why some people are unable to return to work.

Sweet said that there could be a "skills mismatch" between those unemployed and the positions businesses are looking to fill, which might have also contributed to the labor supply issue.

Some of these factors constraining labor supply are "temporary," so the lull in job growth shouldn't last too long, Sweet said.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said in an interview on Bloomberg Television that the jobs report in April showed that the U.S. Federal Reserve doesn't need to change its ultra-loose monetary policy.

"We need to rebuild this labor market and put them back to work. Then there will be plenty of time to normalize monetary policy," Kashkari added.

Yellen said the country still needs to remove barriers to higher labor market participation, noting that 4.2 million women had dropped out of the labor force between February and April last year, due to caregiving burdens, and nearly two million have not yet returned.