There is no joy in economic Mudville today, as the latest jobs report has come in and more or less struck out. The U.S. economy added only 266,000 jobs in April 2021 — the one-year anniversary of the worst job loss for any month on record. And while things were not apocalyptically bad one year later, the result came in far below expert forecasts of 1 million new jobs added in April.
The unemployment rate picked back to 6.1 percent in April from 6 percent a month earlier, according to the Bureau of Labor Statistics. The March jobs numbers were also revised down to 770,000 from 916,000 reported last month.
The figures represent the slowest pick-up in the jobs sector since January and confounded estimates that as vaccine rollout expanded hiring would surge alongside it. And while over a quarter million new jobs under more normal circumstances would be a normal or even solid performance, the U.S. economy remains down 8.2 million jobs from where it was in February of 2021 and the more sluggish than expected run-up to recovery has experts anticipating a bumpy economic ride immediately ahead.
Or perhaps a recovery to a labor world somewhat different than the one we left behind.
According to PYMNTS’ latest Main Street report, the job market is changing as small business owners — the country’s primary employers — are thinking creatively about their staffing to stay afloat during what has been a trying time.
Most are hitting their own finances pretty hard — according to PYMNTS’ latest data 30 percent of all Main Street Survivor business owners report having used their own money to support their businesses since the pandemic began, though the practice has grown less common in the past three months, however, with 25 percent of owners reporting doing so in that time frame.
They are also cutting and realigning their employment pictures: 18 percent of Main Street Survivor business owners have cut their full-time staff and 15 percent have lowered their workers’ salaries. Both of these practices have grown less common in the last three months, but that is partly because many Main Street Survivors have fewer full-time and more part-time workers to pay at this point.
To keep the doors open, Main Street Survivors are now hiring more temporary workers than they had in the year since shutdowns began, with 16 percent of business owners hiring temporary workers in the last three months — up from the average 11 percent during the year prior to the pandemic. Moreover, according to the data, 15 percent have specifically reduced full-time staff to hire temporary workers instead. This strongly suggests that Main Street Survivors will continue to favor temporary workers over full-time employees going forward.
The labor market, by the data available, may simply be changing.
But analysts, despite their massive recent strike-out on the jobs report, remain confident that the figures this week represent something more akin to a blip than a fundamental shift.
Other data, like weekly claims for unemployment benefits, are still indicating growth in the falling number of jobless claims being filed. Last week, jobless claims dropped below 500,000, a new pandemic-era low.
“With most of the high-frequency indicators still pointing to further improvement and jobless claims falling like a stone in recent weeks … we doubt that it signals the recovery is at risk,” Capital Economics Senior U.S. Economist Michael Pearce noted.
While it may not signal a recovery at risk, it may indicate an economy undergoing fundamental change.
Hospitality is recovering more slowly than expected, according to the recent government figures, while factories and manufacturers have trouble finding specialized and even entry-level workers as employees worry that those jobs are at fundamental risk for either robotic replacement or overseas export.
“The details of the data show signs that the pool of available labor is extremely tight,” wrote Jefferies economists Thomas Simons and Aneta Markowska in a note to clients.
Tight and in a great state of flux, as employers and laborers are redefining what the working world should look like going forward.
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