U.S. employers added 266,000 jobs in April, the government reported Friday, far below what economists had expected and a dramatic slowdown from March’s rapid hiring pace.
The jobless rate rose slightly to 6.1 percent.
Economists had forecast an addition of about a million jobs.
The increase for March was revised down to 770,000 from 916,000.
Still, more opportunities are bubbling up as coronavirus infections ebb, vaccinations spread, restrictions lift and businesses reopen. Job postings on the online job site Indeed are 24 percent higher than they were in February last year.
“There’s been a broad-base pickup in demand,” said Nick Bunker, who leads North American economic research at the Indeed Hiring Lab. The supercharged housing market is driving demand for construction workers. There is also an abundance of loading, stocking and other warehousing jobs — a side-effect of the boom in e-commerce.
The economy still has a lot of ground to regain before returning to prepandemic levels. Millions of jobs have vanished since February 2020, and the labor force has shrunk.
As the economy fitfully recovers, there are divergent accounts of what’s going on in the labor market. Employers, particularly in the restaurant and hospitality industry, have reported scant response to help-wanted ads. Several have blamed what they call overly generous government jobless benefits, including a temporary $300-a-week federal stipend that was part of an emergency pandemic relief program.
But the most solid evidence of a real shortage of workers, economists say, is rising wages. And that is not happening in a sustained way.
As Jerome H. Powell, the Federal Reserve chair, said at a news conference last week: “We don’t see wages moving up yet. And presumably we would see that in a really tight labor market.”
Millions of Americans have said that health concerns and child care responsibilities — with many schools and day care centers not back to normal operations — have prevented them from returning to work. Millions of others who are not actively job hunting are considered on temporary layoff and expect to be hired back by their previous employers once more businesses reopen fully. At the same time, some baby boomers have retired or switched to working part time.
This week the Republican governors of Montana and South Carolina said they planned to cut off federally funded pandemic unemployment assistance at the end of June, citing complaints by employers about severe labor shortages.
That means jobless workers there will no longer get a $300-a-week federal supplement to state benefits, and the states will abandon a pandemic program that helps freelancers and others who don’t qualify for state unemployment insurance. (Montana will, however, offer a $1,200 bonus for those taking jobs.)
“What was intended to be short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home,” declared Gov. Henry McMaster of South Carolina.
But that view is just one piece of a broad debate about the impact of temporarily enhanced unemployment benefits during the pandemic.
Gail Myer, whose family owns six hotels in Branson, Mo., says the $300-supplement is indeed a barrier to hiring. “I talk to people all over the country on a regular basis in the hospitality industry, and the No. 1 topic of discussion is shortage of labor,” he said.
Before the pandemic, Mr. Myer said, there were about 150 full-time employees at his six hotels. Now, staffing is down about 15 percent, he said. Jobs at Myer Hospitality for housekeepers, breakfast attendants and receptionists are advertised as paying $12.75 to $14 an hour, plus benefits and a $500 signing bonus.
Worker advocacy groups offer a different perspective. “The shortage of restaurant workers we are seeing across the country is not a labor-shortage problem; it’s a wage-shortage problem,” said Saru Jayaraman, president of One Fair Wage, a minimum-wage advocacy group.
In surveys of food service workers by One Fair Wage and the Food Labor Research Center at the University of California, Berkeley, three-quarters cited low wages and tips as the reason for leaving their jobs since the coronavirus outbreak. Fifty-five percent mentioned concerns about Covid-19 as a factor. And nearly 40 percent cited increased hostility and harassment from customers, often related to wearing masks, in addition to long-running complaints of sexual harassment.
Amy Glaser, senior vice president at the staffing firm Adecco, said former restaurant workers and others were migrating toward warehousing jobs that had raised wages to as high as $23 an hour and customer service jobs that could be done from home.
Global stocks look to end the week on an upbeat note as the latest U.S. jobs report is expected to show that payrolls grew by about 1 million last month and the unemployment rate fell.
The S&P 500 is set to open slightly higher, futures indicated. The U.S. benchmark index has already gained 0.5 percent this week. The Stoxx Europe 600 rose 0.5 percent on Friday.
Copper prices climbed to a record high on Thursday. The metal is often seen as a barometer for the overall health of the global industrial economy, and the price has risen nearly 120 percent since tumbling at the start of the pandemic. The prices of several other commodities, including steel, aluminum and lumber, have increased as the economy has begun to grow.
April’s jobs gains will add to the more than 900,000 hires reported in March as the vaccine rollout has allowed more businesses to reopen and other pandemic restrictions to ease. Other major economies are also on the path out of lockdowns and have raised their outlook, including in Britain, where the central bank forecast a faster recovery on Thursday. Still, rising coronavirus cases in other countries, especially India, has tempered some of the optimism.
The euro rose 0.3 percent against the dollar after a member of the European Central Bank’s Governing Council said the bank could slow down its bond-buying program in June, Bloomberg reported. Central banks are determining how to wind down some of their monetary stimulus measures as the global economy rebounds from the effects of the pandemic.
BMW was the latest German carmaker to report a strong recovery from the pandemic, fueled by China. BMW said Friday that profit jumped fivefold to 2.8 billion euros, or $3.4 billion, while sales rose 15 percent to 26.8 billion euros. Sales in China doubled, to 230,000 vehicles, or nearly as many as all of Europe combined. BMW shares rose 1.9 percent in Germany.
Overnight, data showed a larger-than-expected increase in Chinese exports in April and that the services sector expanded at the fastest rate this year, according to the Purchasing Managers’ Index.
The United States needs to quickly find new supplies of lithium as automakers ramp up manufacturing of electric vehicles.
Lithium is used in electric car batteries because it is lightweight, can store lots of energy and can be repeatedly recharged. Other ingredients like cobalt are needed to keep the battery stable.
But production of raw materials like lithium, cobalt and nickel that are essential to these technologies are often ruinous to land, water, wildlife and people, Ivan Penn and Eric Lipton report for The New York Times. Mining is one of the dirtiest businesses out there.
That environmental toll has often been overlooked in part because there is a race underway among the United States, China, Europe and other major powers. Echoing past contests and wars over gold and oil, governments are fighting for supremacy over minerals that could help countries achieve economic and technological dominance for decades to come.
Mining companies and related businesses want to accelerate domestic production of lithium and are pressing the administration and key lawmakers to insert a $10 billion grant program into President Biden’s infrastructure bill, arguing that it is a matter of national security.
“Right now, if China decided to cut off the U.S. for a variety of reasons we’re in trouble,” said Ben Steinberg, an Obama administration official turned lobbyist. He was hired in January by Piedmont Lithium, which is working to build an open-pit mine in North Carolina and is one of several companies that have created a trade association for the industry.
So far, the Biden administration has not moved to help push more environmentally friendly options — like lithium brine extraction, instead of open pit mines. Ultimately, federal and state officials will decide which of the two methods is approved. Both could take hold. Much will depend on how successful environmentalists, tribes and local groups are in blocking projects.
Even as a chip shortage is causing trouble for all sorts of industries, the semiconductor field is entering a surprising new era of creativity, from industry giants to innovative start-ups seeing a spike in funding from venture capitalists that traditionally avoided chip makers, Don Clark reports for The New York Times.
“It’s a bloody miracle,” said Jim Keller, a veteran chip designer whose résumé includes stints at Apple, Tesla and Intel and who now works at the artificial intelligence chip start-up Tenstorrent. “Ten years ago you couldn’t do a hardware start-up.”
Chip design teams are no longer working just for traditional chip companies, said Pierre Lamond, a 90-year-old venture capitalist who joined the chip industry in 1957. “They are breaking new ground in many respects,” he said.
Equity investors for years viewed semiconductor companies as too costly to set up, but in 2020 they plowed more than $12 billion into 407 chip-related companies, according to CB Insights. Cerebras, a start-up that sells massive artificial-intelligence processors that span an entire silicon wafer, for example, has attracted more than $475 million. Groq, a start-up whose chief executive previously helped design an artificial-intelligence chip for Google, has raised $367 million.
Taiwan Semiconductor Manufacturing Company and Samsung Electronics have managed the increasingly difficult feat of packing more transistors on each slice of silicon. IBM on Thursday announced another leap in miniaturization, a sign of continued U.S. prowess in the technology race.
More companies are concluding that software running on standard Intel-style microprocessors is not the best solution for all problems. Giants like Apple, Amazon and Google more recently have gotten into the act. Google’s YouTube unit recently disclosed its first internally developed chip to speed video encoding. And Volkswagen said last week that it would develop its own processor to manage autonomous driving.
The Federal Reserve’s Financial Stability Report, released Thursday, followed an unusual six months for markets. Over that period, stocks climbed steadily as the U.S. economic outlook rebounded, and stories of excess began to crop up, such as the frothy markets around so-called “meme stocks” such as GameStop and huge losses at a number of banks tied to problems at a hedge fund, Archegos Capital Management.
“While broader market spillovers appeared limited, the episode highlights the potential for material distress” at financial companies that aren’t banks “to affect the broader financial system,” the Fed said in its report. It said hedge fund opacity had also raised questions during the meme stock episode: Some funds that were betting against the stocks in question took losses as chat board vigilantes poured into them.
The answer to both episodes, the Fed seemed to suggest, starts with better data, Jeanna Smialek reports for The New York Times.
Gary Gensler, the new chairman of the Securities and Exchange Commission, said at a House Committee on Financial Services hearing that the S.E.C.’s staff has been working on a report addressing the issues raised by the GameStop episode that will be released this summer. He also said new rules may be needed for brokerage apps that turn stock trading into a game or contest, a method called gamification, Matthew Goldstein reports.
Mr. Gensler said the collapse of Archegos pushed regulators to consider whether traders should be required to disclose derivatives. Archegos’s losses were mostly attributed to the firm investing heavily in total return swaps, a type of highly leveraged derivative that can give a trader exposure to a stock without actual ownership.