UPDATE 2 - US Adds 266,000 Jobs In April, But Unemployment Edges Up To 6.1% - Labor Dept.

WASHINGTON (Pakistan Point News / Sputnik - 07th May, 2021) The US unemployment rate rose to 6.1 percent in April as the country added a sharply lower-than-forecast 266,000 jobs in a pandemic-suppressed market, the Labor Department announced on Friday.

"Total nonfarm payroll employment rose by 266,000 in April, and the unemployment rate was little changed at 6.1 percent," the Bureau of Labor Statistics, an unit within the Labor Department, said in a statement. In March, there were 916,000 job additions, while the unemployment rate was at 6 percent.

Economists polled by US media had expected as many as 1 million new jobs for April, making what the Labor Department reported disappointing for many.

"This is a big surprise," economist Adam Button said in a comment on ForexLive. "The economy reopened in a big way in April and other indications showed much better hiring than this."

Indeed, the Labor Department said there were notable job gains last month in the leisure and hospitality industry and local government education and other services, but these were partially offset by losses in temporary help services and in couriers and messengers.

"There's a bit of disbelief around this number," Button added. "I wonder if this is a game-changer and shifts the conversation towards the Fed[eral Reserve]'s baseline about rates staying very low for a very long time along with only-transitory inflation."

The Federal Reserve, has kept US interest rates at between zero and a quarter percent since the outbreak of the coronavirus pandemic last year, with Chairman Jerome Powell arguing that the rise in price pressures in recent months were temporary trends that would abate over time.

A rash of US economic data, from consumer spending to home sales, have exceeded forecasts lately, putting upward pressure on prices. That trend continued on Friday, with US wholesale inventories, which indicate the amount of time goods stay on store shelves before they are replaced by new merchandise, rising by 4.6 percent in March versus expectations for a 1 percent growth.

More than a year into the coronavirus crisis, restoring job growth remains one of the biggest challenges of US policy makers.

US House Speaker Nancy Pelosi said on Friday the slowdown in jobs growth in April underscored the need to pass President Joe Biden's $2.3 trillion American Jobs Plan, which largely involves rebuilding the country's infrastructure, including bridges and roads, that the administration says has been ignored for decades.

The United States lost more than 21 million jobs between March and April 2020, at the height of business lockdowns forced by the coronavirus. More than 8 million of those jobs have yet to return, officials say.

The economy itself shrank 3.5 percent in 2020, although first quarter data for 2021, released last week by the Commerce Department, showed a dynamic rebound of 6.4 percent.

The Fed has forecast an economic growth of 6.5 percent for all of 2021 although Chairman Powell said he did not expect "full employment" - defined by a monthly unemployment rate of 4.0 percent or lower - to return before 2023.