Not exactly one in a million, but Friday's jobs number was still surprising to many economists.
Expectations for non-farm payrolls last week were roughly one million new jobs for April, with some estimates exceeding that number. The actual number released was just 266,000 jobs filled—about half of the monthly average so far in 2021 and about a third of March's gains.
So why the sudden slowdown? Well, that depends on who you talk to.
"This figure is so far away from what was expected, it is hard to know exactly what it may mean," said Steve Wyett, chief investment strategist for BOK Financial®. "There are multiple possibilities, and I suspect there is more than one factor at play here."
Early calls are for the job growth number for May to be over one million, meaning this month's number might just represent some timing issues with data collection and/or issues with seasonal adjustments. The monthly jobs report can be a bit "messy" and subject to wild swings. In fact, before April's disappointing turn, job growth was accelerating quite rapidly in the U.S., possibly supporting this explanation. Additionally, there is always a bit of ambiguity in the monthly figures.
"Frankly, April's number isn't set in stone just yet either," added Wyett. "The monthly jobs report is always subject to revisions going forward and is usually adjusted up or down as new data is collected in the intervening weeks."
Job supply outpacing job demand?
One thing economists could agree on was that job supply wasn't an issue in April. U.S. job openings soared to 8.1 million available jobs last month—a new record level. The Bureau of Labor Statistics, of monthly payrolls report frame, said last month that job openings were at a two-year high. From that common ground, things get political quickly.
Conservative voices were quick to point to the enhanced unemployment benefits as the reason that most of the unfilled positions in April tended to be on the lower end of the wage scale. The Biden administration disagreed, saying there's little evidence for that claim. They pointed to closed schools and daycare centers, saying many parents have to stay home to care for children.
"There's probably a degree of truth in both claims, though the longer both of these proposed issues continue, the more likely they are to cause permanent damage to the labor market," said Wyett.
Whatever the cause of last month's odd jobs number, there is at least a silver lining. While not a great one-month figure, the situation might not be as bad as it seems. Job supply outpacing job demand is a much easier problem to fix than the reverse.
"We have to remember that ‘one month does not a trend make,'" added Wyett. "We'll have an answer to how significant this April data is in fewer than 30 days."