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Surprisingly bad labor market figures: job growth remains well below expectations

2021-05-09T04:20:19.326Z

The US labor market is recovering more slowly than expected after the corona crisis. According to the Ministry of Labor, only 266,000 new jobs were created in April. Experts had expected a million.



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Las Vegas Unemployed Counseling Center: Unexpectedly Bad Data

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John Locher / AP

To the surprise of the experts, the US labor market comes out of the corona crisis much worse.

In April, only 266,000 jobs were created outside of agriculture and thus far fewer than expected, as the government in Washington announced.

Economists had expected 978,000 new jobs - after a revised increase in jobs of 770,000 in March.

The financial markets reacted immediately to the unexpectedly bad data.

The euro rose against the dollar, the price of gold expanded its gains, and ten-year US bond yields fell.

The bad report could also delay the interest rate turnaround in the US.

Because it shows that the recovery in the labor market is not yet stable and the US Federal Reserve headed by Fed Chairman Jerome Powell wants to continue its loose monetary policy until noticeable further progress has been made on the way to full employment and price stability.

Unemployment rate at 6.1 percent

The unemployment rate for April, found in a separate survey, was 6.1 percent, up from 6.0 in March.

Tens of millions of jobs were lost in the United States during the crisis.

However, the number of initial jobless claims had recently dropped to the lowest level in the corona crisis.

However, as the pace of job creation has now slowed again, it will take even longer "until the still large employment gap is approximately closed," said Bastian Hepperle from Bankhaus Lampe.

Ulrich Wortberg from Helaba said that compared to the situation before the crisis, around eight million jobs were still missing.

VP Bank chief economist Thomas Gitzel expects that in the coming months there will also be “an even more pronounced increase in new positions”.

Because the creation of new jobs is only postponed.

Then a monthly plus of two million is also possible.

US companies may currently have problems "finding enough workers with the right qualifications," said LBBW banker Chlench.

"It is also hard to believe that there should have been job cuts at couriers of all places."

US President Joe Biden wants to fuel the upswing with a $ 1.9 trillion stimulus package.

As a result, millions of Americans have already received checks from the state, which is said to stimulate consumption.

apr / Reuters

Source: spiegel

All business articles on 2021-05-09

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