Economists expected the U.S. economy would add one million jobs in April, bringing the unemployment rate down to 5.8%, Instead, the economy added only 266,000 jobs, the unemployment rate inched up slightly to 6.1%, and that wasn’t all.
According to CNBC:
There was more bad news: March’s originally estimated total of 916,000 was revised down to 770,000, though February saw an upward revision to 536,000 from 468,000.
“I think this is just as much about a shortage in labor supply as it is about a shortage of labor demand,” said Jason Furman, an economist at Harvard University and a former Obama administration advisor. “If you look at April, it appears that there were about 1.1 unemployed workers for every job opening. So there are a lot of jobs out there, there is just still not a lot of labor supply.”
Pandemic-era enhanced unemployment benefits have outlived the strict lockdowns they were created in response to, and many are still receiving more from the government than they would from work. A study from the National Bureau of Economic Research last year found that 68% of those on unemployment at the time with the federal supplement made more than they did on the job. There are also people who could earn just slightly more than unemployment pays by working, and don’t see putting in 40 hours a week enough to justify the difference.
While the leisure and hospitality industry added 331k jobs in April, the industry is still 2.9 million workers short of where it was before the pandemic. Restaurants have also been struggling to find workers, with some fast food establishments raising wages and resorting to offering signing bonuses to deal with the shortage.
At the state level, Montana’s Governor is attempted to fight this problem with the creation of a “return to work” bonus program that offers $1,200 to individuals on unemployment who accept work at complete at least four paid weeks of work. The Governor also announced the end of the state’s participation in the federal unemployment benefit programs to transition back to the pre-pandemic system.
The economic damage from the pandemic hasn’t been equal, with states that voted for Biden losing twice as many jobs as those who voted for Trump at the pandemic’s onset. The recoveries of blue states have also lagged those of red states.
UPDATE: Biden has since attempted to spin the trainwreck report:
Matt Palumbo is the author of Dumb and Dumber: How Cuomo and de Blasio Ruined New York, Debunk This: Shattering Liberal Lies, and Spygate