The U.S. economy only added 266,000 jobs in April, a distinct shortfall from economist’s expectations.
The unemployment rate unexpectedly rose to 6.1% — well below the April 2020 peak of 14.7%, but about twice the pre-crisis level, the Labor Department said in its monthly payroll report, released Friday morning. Economists surveyed by Refinitiv expected the report to show that unemployment fell to 5.8% and the economy added 978,000 jobs.
At the same time, optimism about the economic recovery is growing. Many Americans are flush with cash after having received $1,400 federal relief checks, along with savings they have built up after cutting back on travel, entertainment and dining out over the past year. Millions of consumers have begun spending their extra cash on restaurant meals, airline tickets, road trips and new cars and homes.
Most economists expect job growth to strengthen as more vaccinations are administered and trillions in government aid spreads through the economy. Even if another uptick in COVID-19 cases were to occur, analysts don’t expect most states and cities to reimpose tough business restrictions. Oxford Economics, a consulting firm, predicts that a total of 8 million jobs will be added this year, reducing the unemployment rate to a low 4.3% by year’s end.
Still, the economic rebound has been so fast that many businesses, particularly in the hard-hit hospitality sector — which includes restaurants, bars and hotels — have been caught flat-footed and unable to fill all their job openings. Some unemployed people have also been reluctant to look for work because they fear catching the virus.
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