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March 3, 2021

US Economy Adds Fewer Jobs in April Than Expected

The U.S. economy added 160,000 jobs in April as construction sector barely added new employment and retail sector shed labors, according to the latest report by the U.S. Department of Labor.

Below than the average growth of 200,000 jobs in the first quarter may raise concerns about the weakness of the economy its spillover effects to the labor market. The new data is contrary to the assessment of the U.S. bank last month which painted a fairly upbeat assessment of the labor market.

According to the data, nonfarm jobs increased by 160,000 in April, showing the smallest gain in the past seven months. The department also revised its data for February, slashing the previous number by 19,000.

The new data will also trigger speculations whether the Federal Reserve will raise interest rate before the end of the year, after raising it by a quarter-point in December after nearly seven years of gap.

The unemployment rate remained at 5 percent in April. The labor force fell by 362,000 as people dropped out in April. Jobless claims were up 17,000 to 274,000 in the week ended April 30, according to the data.

The private services sector added the most jobs. Manufacturing added 4,000 jobs in April, recovering from the dismal previous month when it shed 29,000 jobs. Continuing depressed oil prices continue to hit the energy sector with mining losing another 8,000 jobs. Since, 2014, Mining sector has lost 191,000 jobs with 75 percent of the losses in support activities.

Construction sector added just 1,000 jobs while retail payrolls fell by 3,100, adding to the slower than expected job growth in April.

Despite sluggish growth, average hourly earnings posted increase, rising eight cents, or 0.3 percent in April. The year-on-year increase in earnings now stands at 2.5 percent.

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