Unemployment Rate Ticked Up to 6.1% in April as Monthly Job Growth Slowed to 266K

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What’s the story?

• The Bureau of Labor Statistics (BLS) on Friday released its jobs report for April 2021, which found the U.S. economy added 266,000 jobs and the unemployment increased by 0.1 percentage points to 6.1%. The report falls short of the Dow Jones forecast of 1 million jobs added and a 5.8% unemployment rate.
• It’s the weakest jobs report since this January and comes after the economy added 536,000 jobs in February and 770,000 jobs in March. This USAFacts chart shows the monthly job numbers dating back to January 2020:

• This USAFacts chart shows the monthly unemployment rate dating back to 2007:

Jobs Report Sector Breakdown

• The BLS report observes:

“Notable job gains in leisure and hospitality, other services, and local government education were partially offset by employment declines in temporary help services and in couriers and messengers.”

• Leisure and hospitality added 331,000 jobs “as pandemic-related restrictions continued to ease in many parts of the country.” The industry is down 2.8 million jobs, or 16.8%, compared to its pre-pandemic level in February 2020. This USAFacts chart shows that restaurants and bars had 1.7 million fewer jobs in April compared to the pre-pandemic level:

• The other services industry added 44,000 jobs, driven largely by repair and maintenance (+14,000) and personal and laundry services (+14,000), which leaves the sector 352,000 jobs below its pre-pandemic level.
• Local government education added 31,000 jobs in April but is 611,000 jobs below its February 2020 level.
• Within the professional and business services sector, employment in temporary help declined by 111,000 last month and is 296,000 jobs below its pre-pandemic level.
• Within the transportation and warehousing industry, employment in couriers and messengers declined by 77,000 jobs last month but is up by 126,000 compared to February 2020.
• Manufacturing lost 18,000 jobs in April following gains of 89,000 in the prior two months, which leaves the sector with 515,000 jobs less than its pre-pandemic level.

Demographic Unemployment Information

• Unemployment rates were largely unchanged for adult men (up to 6.1% from 5.8% in March), adult women (down to 5.6% from 5.7% in March), and teenagers (to 12.3% from 13.0% in March).
• Unemployment rates had little to no change among whites (5.3% from 5.4% in March), blacks (9.7% from 9.6% in March), Hispanics (7.9% from 7.9% in March), and Asians (5.7% from 6.0% in March).
• This USAFacts chart shows the unemployment rate based on race and ethnicity dating back to early 2019:

Revisions & Data Notes

• Employment in February was revised up by 68,000 from +468,000 to +536,000.
• Employment in March was revised down by 146,000 from +916,000 to +770,000.
• As it has since March 2020, the BLS published an estimate of what the unemployment rate would have been had misclassified workers been included. The misclassification hinges on a question about the main reason people were absent from their jobs, with people absent due to temporary, pandemic-related closures recorded as absent due to “other reasons” as opposed to unemployed due to temporary layoff.
• Using this approach, the April unemployment rate would have been 0.3 percentage points higher than reported. The BLS notes that this represents the upper bound of their estimate of misclassification and probably overstates the size of the misclassification error.
• According to usual practice at the BLS, data is accepted as recorded in the household survey. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.

— Eric Revell

(Photo Credit: iStock.com / halbergman)