Wall Street is still shaking off the cobwebs from the Department of Labor’s April Employment Report. In April, the economy added just 266,000 new jobs, well below the 998,000 expected. The national unemployment rate also rose from 6% to 6.1%, its first increase since April 2020. Wall Street had forecast a decline to 5.8%.
Of the 11 sectors of the U.S. economy, just six posted job gains in April. The biggest gain was in the Leisure & Hospitality sector, which added 331,000 new jobs after gaining 206,000 in March. However, as many on Wall Street are quick to point out, if you remove the Leisure & Hospitality’s 331,000 gain, the other 10 sectors combine for a net loss of 65,000 jobs. The Leisure & Hospitality sector, which includes bars, restaurants, hotels, museums, theaters and sporting venues, among others, was the most heavily impacted by pandemic-related government restrictions. In March and April 2020, the Leisure & Hospitality sector lost more than 8.3 million jobs, or roughly 49% of its pre-pandemic workforce.
To simply chalk this up as a disappointing employment report belies a greater point. The country is supposed to be in the heart of a vaccine-fueled reopening that should drive a resurgence in the economy and labor market. Simply put, this wasn’t supposed to happen. So, what’s behind this sudden weakness in the U.S. labor market?
Because of the pandemic, one might logically assume a lack of jobs. But on Tuesday, the Department of Labor reported there are currently more than 8.1 million unfilled job openings, a new all-time record high. This is 1.1 million higher than in February 2020, before the pandemic.