The

Jobs Report: The Boom That Wasn’t

April’s anemic job creation was so out of line with what
other indicators have suggested that it will take some
time to unravel the mystery.
It’s a little secret of the news business that for some anticipated events, like a Supreme Court
decision or the death of a prominent figure, we pre-write much of an article or different versions
of them so that we can publish quickly once news occurs.

Which is why there is now a trashed draft of this article explaining how the April jobs numbers
show what a hyper-speed economic recovery looks like. It was completely wrong.

Employers added only 266,000 jobs last month, the government reported Friday morning, not the
million or so that forecasters expected. The unemployment rate actually edged up, to 6.1 percent.

The details of the new numbers are messy. Temporary employment fell sharply (down 111,000
jobs), while hiring in the leisure and hospitality sector was robust (up 331,000 jobs). It will take
time to figure out why so many mainstream forecasts were so wrong — the modest job creation is
out of whack with what other indicators have suggested — and whether some part of the weak
results is more statistical aberration than reality.

But if robust job growth doesn’t return quickly, it will be very concerning. The economy is still
short 8.2 million jobs from its February 2020 level. The great hope has been that employers would
fill that gap rapidly, bringing the United States back to its full potential in short order.

Your Coronavirus Tracker: We’ll send you the latest data for places you care about each day.

Even if you view April as an outlier, job growth has averaged only 524,000 a month for the last
three months, a pace that if continued would imply a long slog back to full health. It certainly does
not signal the kind of rapid boom that many forecasters have started to expect, and that the Biden
administration and the Federal Reserve are hoping for.

These numbers are consistent with the story many business leaders are telling, of severe labor
shortages — that demand has surged back but employers cannot find enough workers to fulfill it,
at least not at the wages they are accustomed to paying. Many employers and conservatives argue
that the expanded federal unemployment benefits have been too generous (they were extended as
part of the recent pandemic rescue aid package and are scheduled to expire in September).

Citing the jobs report, the Chamber of Commerce on Friday urged an immediate end to the $300
weekly unemployment benefit supplement.

April’s slow job growth was accompanied by significant pay increases. Average hourly earnings
rose by 0.7 percent, not too shabby on its own. And in certain sectors the pay raises were
blockbusters, including a 4.8 percent rise in leisure and hospitality average hourly earnings — in
a single month.

It’s worth noting that the labor force is growing — an additional 430,000 Americans were either
working or looking for work in April — so it’s pretty much the opposite of the situation after the
2008 recession, when wages were growing slowly and millions were leaving the labor force.

Still, it remains possible that many people remain reluctant to jump back into work for a variety
of other reasons: having to care for children whose classes are remote; fearing the coronavirus;
reconsidering their careers.

Back in 2010, the Obama administration introduced one of the more unfortunate economic
messaging concepts of recent decades, announcing that a “Recovery Summer” was underway. It
became a punchline, because while the economy was expanding, Americans were still far worse
off than they’d been before the 2008 recession, and improvement was coming very slowly.

That’s one outcome the Biden administration desperately wants to avoid.