#OPINIONLEADER# #Non-FarmPayrolls#

ByJin Dao Tai

 MAY 12, 2021

April’s jobs report a real letdown.

The U.S. nonfarm payroll data for April was a real bummer. With a steady increase in the number of jobs being added into the economy during the first quarter, expectation is that the trend will continue into the second quarter. With only 266,000 jobs being added into the economy as opposed to the expectation of 990,000 job, the market was in complete disappointment, causing the U.S. dollar to take a hit. The number of jobs added into the economy in March was also revised down from 916,000 to 770,000, an indication that employment was overestimated.

High demand but low supply of labour.

The general consensus for why the low number of jobs increase is a shortage of labour. One of the most prominent sectors is construction. Despite the number of residential buildings that began construction hitting the highest level in 15 years, the construction sector added zero jobs in April as opposed to 97,000 jobs added in March. Jobs in the temporary help services sector also sees a strong loss of 111,400 jobs.

Why the shortage of workers?

Many believe what led to the shortage of workers is the reluctance of people to return to the workforce. One reason is that the $300-per-week federal jobless benefit received by many Americans exceeded the amount they earn while working, thus enticing them not to return to the workforce. This also explains why the monthly average hourly earnings of employees increased by 0.7% from the previous month’s -0.1%. Without all the low wages contributing to the calculation of the earnings figure, the average will be pushed up.

Another reason for the shortage of workers is that many parents choose to stay at home to care for their children who are doing distance learning. Although 31,000 jobs in the local government education sector were added in April, the sector is still 611,000 jobs lower than the pre-pandemic level in February.

On the brighter side of things.

Despite the disappointment from the jobs report, all is not lost. 331,000 jobs from the leisure & hospitality sector were added into the economy, signifying the largest gains in April among all sectors. The continued increase in jobs in this sector indicates that the easing of COVID-19 restrictions across the country has boosted economic activities and employment.

To conclude, the slowdown in the number of jobs added will be temporary as the U.S. economy continues to pick up. Also, the unemployment benefits that will be expiring in September is also subjected to the government’s intervention and if ended earlier, this will no doubt motivate more people to return to the workforce.