US Nonfarm Payrolls disappointed in April – UOB

Senior Economist at UOB Group Alvin Liew reviews the latest labour market report (Friday).

Key Quotes

“The US economy continued to add jobs in April but it was nonetheless a big disappointment as the US nonfarm payrolls (NFP) rose by just 266,000 jobs, well missing the Bloomberg median estimate of 1 million jobs. A further disappointment was the marked downward revision to the number of jobs gained in March to 770,000 (from the previous estimate of 916,000).”

“The positive jobs print in April was contributed by the services sector and government hiring (48,000). Within services, the jobs creation was mainly attributed to the continued hiring recovery for virus-sensitive leisure and hospitality industries (+331,000, of which bars and restaurants gained the lion’s share with an increase of 187,000 jobs, hotel-related hiring added 54,000, and amusement, gambling and recreation businesses hired 73,000). Despite the strong gains in the period, employment in this industry is still 2.8 million (16.8%) lower compared to the pre-pandemic level of Feb 2020.”

“The number of unemployed persons was at 9.8mn in Apr (slightly higher than 9.7mn in Mar but importantly, it is still 5.7mn higher than in pre-pandemic level of Feb 2020). The number of persons on temporary layoff was at 2.1mn in Apr (little changed from Mar) but those who were unemployed for less than 5 weeks rose to 2.4mn (from 2.2mn in Mar) while long-term unemployment (those who were out of work for 27 weeks or more) edged lower to 4.18mn (from 4.22mn in Mar).”

“Following the weak jobs report, both US President Biden and US Treasury Secretary Yellen echoed similar view that April jobs numbers underscores the US economy is moving in the right direction but has a long way to go/long climb back to economic recovery Importantly, both were of the view that the additional unemployment benefits is not the factor keeping workers out of labor market.”