US job growth misses all estimates; unemployment rate at 6.1%

US job growth unexpectedly softened in April from the prior month as employers found it difficult to attract workers, a development that’s holding back momentum in the labor market.

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The dearth of job candidates has led some states to swing into action to alleviate the labor shortage. (AP representative image)

U.S. job growth unexpectedly softened in April from the prior month as employers found it difficult to attract workers, a development that’s holding back momentum in the labor market.

Payrolls increased 266,000 after a downwardly revised 770,000 March increase, according to a Labor Department report Friday that fell well short of projections. Economists in a Bloomberg survey projected a 1 million hiring surge in April. The unemployment rate edged up to 6.1%.

Treasury yields plunged, while inflation expectations spiraled downward and dollar turned sharply lower. U.S. stock futures maintained gains.

The disappointing payrolls print leaves overall employment well short of its pre-pandemic level and is consistent with recent comments from company officials highlighting challenges in filling open positions. While job gains accelerated in leisure and hospitality, employment at temporary-help agencies and transportation and warehousing declined sharply.

Federal Reserve Chair Jerome Powell said last week the dichotomy likely reflects a combination of a skills gap, child care obligations and lingering virus fears. Some firms indicate enhanced unemployment benefits and the latest round of pandemic-relief checks are discouraging a return to work.

The dearth of job candidates has led some states to swing into action to alleviate the labor shortage. Montana is trying to lure people back into the workforce with a $1,200 payment if they stop collecting unemployment benefits and work for at least four weeks. South Carolina plans to terminate all federal and pandemic-related jobless programs at the end of June.