The U.S. economy added far fewer than expected new jobs last month, the Labor Department said Friday, underscoring the uneven nature of the economic recovery despite trillions in spending and record-low interest rates.
The Bureau for Labor Statistics said 266,000 new jobs were created last month, with headline unemployment rate edging higher, to 6.1%. The April tally was far lower than the market forecast of 978,000 and suggests the gradual re-opening of non-essential business, as well as the accelerated vaccine rollout, isn't being played out in labor markets were prospective workers are potentially demanding higher wages.
The BLS also lowered its March jobs addition estimate to 770,000 from 916,000 and noted that hourly wages were up 0.7% on the month, and 0.3% on the year, both figures coming in well ahead of Street forecasts.
“This was a disappointing employment report relative to expectations, particularly as more sectors of the economy are reopening,” said Tony Bedikian, head of global markets at Citizens. “A lot of companies and workers are still concerned about the pandemic, but with COVID-19 vaccines more widely available across the country, the economy still continues to move in a positive direction.”
Earlier this week, a reading of private sector job growth from payroll provider ADP indicated a weaker-than-expected 742,000 new positions were created last month, while the Labor Department's tally of weekly jobless claims fell below 500,000 for the first time since the pandemic began in March of last year.
Stock futures, turned sharply lower following the data release,, with contracts tied to the Dow Jones Industrial Average indicating a 25 point opening bell decline after earlier suggesting a 110 point advance.
Contracts tied to the S&P 5500, which is up 12% for the year, are priced for a 12 bump while the Nasdaq, is set for a 170 point advance.
Benchmark 10-year Treasury bond yields, meanwhile, slumped below 1.5% and the U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.3% lower at a one-week low of 90.911.