They were expecting a million new jobs in April. They got just 266,000, and the unemployment rate ticked up by 1%.

After some good news yesterday, we got some bad news today:

Hiring in the U.S. unexpectedly slowed in April, a sign the nation’s recovery from the pandemic still faces challenges as many businesses struggle to find workers or remain cautious about the economic outlook.

U.S. employers added a modest 266,000 jobs in April, a report Friday by the Labor Department showed, far short of the one million that economists had forecast and the weakest monthly gain since January. The deceleration came after payrolls rose a downwardly revised 770,000 in March and left total employment down by 8.2 million from its pre-pandemic level.

The unemployment rate ticked up to 6.1% in April from 6% a month earlier, partially reflecting an increase in people entering the workforce.

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Signs of labor-market tightness also emerged in Friday’s report, aligning with many companies’ complaints that they can’t find workers to meet demand. Wages for workers rose in April as some employers appeared to lift pay to attract or retain employees. Average hourly earnings for private-sector employees rose by 21 cents to $30.17 in April. The gain is notable because strong hiring in the lower-wage hospitality sector—which occurred in April—would typically put downward pressure on average earnings.

Given that the hospitality sector is one of the most dangerous sectors from a Covid perspective, people are simply no longer willing to die for minimum wage, and this is a good thing. ™

The average workweek increased to 35 hours in April, an indication some employers added worker hours to compensate for the lack of labor.

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Friday’s report adds to the likelihood that the Federal Reserve’s easy-money policies will remain in place in coming months, something financial markets reflected in price movements on Friday.

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The leisure and hospitality sector, including restaurants, accounted for the bulk of employment creation in April, adding 331,000 jobs. The Labor Department said that reflected an easing of pandemic-related restrictions in many parts of the country.

Meaning that other sectors of the economy lost 60,000 jobs.   

When you undershoot your prediction by 74%, and the previous month’s jobs report was revised down by 146,000, you are not having a good jobs report.