Stocks Hit Record Even With April’s Disappointing Job Gains

A surprisingly weak report on hiring in the United States rippled through financial markets on Friday, with the data deflating investors’ concerns that the economy could overheat as it recovers from the coronavirus pandemic.

Employers added 266,000 workers last month, the government said, far below economists’ expectations of an increase of nearly 1 million new positions. The report also revised March’s job gains lower.

As the economy has rebounded from last year’s shutdowns, investors have grown worried this year that the Federal Reserve might be prompted to remove some of its emergency assistance for the economy — by raising interest rates or cutting back on its bond-buying program — sooner than anticipated. One reason the Fed would have to do that, some economists have argued, is that the rapid growth could trigger inflation that the central bank can’t tolerate.

But Friday’s data bolstered the counterargument: The recovery is far from complete.

“This is a highly uncertain environment that we’re in,” Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, said in a Bloomberg Television interview shortly after the report was released. “We have a long way to go, and let’s not prematurely declare victory.”

Yields on government bonds, a primary barometer of investors’ outlook for economic growth and monetary policy, tumbled to as low as 1.46 percent in the minutes after the report before recovering to earlier levels. An index of the U.S. dollar dropped to its lowest level since February.

Investors in high-flying sectors of the stock market have been particularly sensitive to Treasury yields this year — higher yields make risky investments less appealing. But on Friday, the sudden drop in yields lifted technology stocks like Microsoft, Apple and Tesla.

The S&P 500 index rose 0.7 percent, to a record. In Europe, stocks added to their earlier gains, with the Stoxx Europe 600 climbing 0.9 percent.

Some analysts noted that there was good news in Friday’s report. It did show hiring continues, after all, even if it is at a slower pace than Wall Street had anticipated.

“While less good for the economy than a booming labor market, a ‘Goldilocks’ jobs recovery that is neither too hot nor too cold, could continue to support equity markets,” Mike Bell, a strategist at JPMorgan Asset Management, wrote in a note to clients.

The American jobs engine slowed markedly last month, confounding rosy forecasts of the pace of the recovery and sharpening debates over how best to revive a labor market that was severely weakened by the coronavirus pandemic.

Employers added 266,000 jobs in April, the government reported Friday, far below the vigorous gains registered in March. The jobless rate rose slightly to 6.1 percent, as more people rejoined the labor force.














“It turns out it’s easier to put an economy into a coma than wake it up,” Diane Swonk, chief economist for the accounting firm Grant Thornton, said of the disappointing report.

Economists had forecast an addition of about a million jobs. The increase for March was revised down to 770,000 from 916,000.

The Alliance for American Manufacturing blamed supply chain problems for the loss of 18,000 jobs in that sector, noting in particular the impact that a shortage of semiconductors has had on the automotive industry.

And many offices are not yet ready to reopen fully.

“I just think it takes a while for businesses to figure out how many people they need,” said Diane Lim of “It’s understandable, it’s going to take some time, you’re not just going to snap your fingers and get everyone back to work. I don’t view this as terribly troubling or distressing.” (An earlier version of this item incorrectly attributed those statements to Ms. Swonk.)

Ben Herzon, executive director of U.S. economics at the financial services company IHS Markit, agreed. “A single report with unexpected weakness in job gains is not a cause for concern,” he said. “Demand is picking up, activity is picking up.”

He noted that labor force participation had been on the upswing for two months in a row, rising to 61.7 percent last month from 61.4 percent in February.

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-based 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.




–5 million




Jan. ’21

–8.2 million since February 2020

152.5 million jobs in February 2020

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 there are other forces constraining the return to work. 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.







Yellen Says ‘Recovery Will Remain On Track,’ After Weak Jobs Report

Treasury Secretary Janet L. Yellen said on Friday that April’s jobs report, which cited an addition of 266,000 jobs last month, was an indicator that the U.S. has a long road to economic recovery, but described the growth as continued progress.

We knew it would be a long road back to recovery. That’s why the legislation provided lasting support rather than just a few months of relief. We knew this would not be a 100-day battle. And today’s jobs report underscores the long-haul climb back to recovery. But let me be clear, the 266,000 jobs added in April represent continued progress. After all, one year ago, we learned we’d lost over 20 million jobs in one single month. I believe we will reach full employment next year. But today’s numbers also show that we’re not yet finished. As our economy continues to heal, it’s important to consider ways in which we can build back better. Recovery will remain on track, and it may be bumpy from month to month for a variety of factors. You know, there are often quite large revisions to months as well.

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Treasury Secretary Janet L. Yellen said on Friday that April’s jobs report, which cited an addition of 266,000 jobs last month, was an indicator that the U.S. has a long road to economic recovery, but described the growth as continued progress.CreditCredit…Erin Scott for The New York Times

Treasury Secretary Janet L. Yellen said that the economic recovery in the United States will be a long haul but suggested that the labor market continues to be on the path to full employment by next year despite Friday’s disappointing employment data.

The comments came as the Labor Department said employers added 266,000 jobs in April, far below the vigorous gains registered in March. The jobless rate rose slightly to 6.1 percent, as more people rejoined the labor force.

Ms. Yellen said that, although she was expecting to see more substantial job growth last month, the labor market was stronger than the headline numbers suggested. She pointed to an increase in hours worked by employees and a decline in workers who are involuntarily working part-time for economic reasons.

The Treasury secretary acknowledged that the labor force faces a “long haul” to recovering from the job losses caused by the pandemic, noting that more than 8 million lost jobs have yet to be restored.

“The road back is going to be somewhat bumpy,” Ms. Yellen said, adding that jobs figures tend to be volatile on a monthly basis and that, on average, the economy has continued to add jobs at a healthy clip in recent months.

Ms. Yellen also pushed back against the suggestion by some business groups and Republicans that generous jobless benefits are holding back hiring because workers are choosing to collect unemployment insurance. She said that the bigger challenge has been the fact that many families are still without regular child care and are juggling irregular schedules because schools have yet to fully reopen.

Earlier this week, Ms. Yellen clarified comments that she made about the need to raise interest rates if the economy overheats, explaining that she is not prescribing that as necessary any time soon. On Friday, she reiterated that any signs of inflation are likely to be temporary and pointed to supply chain bottlenecks and shortages of commodities for price increases.

April’s jobs report shows how challenging it will be to forecast the speed and tenor of the recovery from the pandemic.
Credit…Stefani Reynolds for The New York Times

Federal Reserve officials have been facing a chorus of criticism for pledging to keep interest rates at rock bottom and for buying government-backed bonds at an enormous scale even as the United States economy bounces back from the pandemic. But after a weaker-than-expected April jobs report, they may have an easier time selling the idea that patience is a virtue.

“I feel very good about our policy approach, which is outcome-based,” Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said in a Bloomberg television interview shortly after the report came out. “Let’s actually allow the labor market to recover, let’s not just forecast that it’s going to recover.”

American employers added 266,000 jobs last month, far short of the one million that economists had been expecting. Analysts agreed that the figure was a severe disappointment, but lined up on little else: Some pointed to the numbers as a sign that the economy remains in a deep hole, while others saw in it validation for the idea that expanded unemployment insurance is discouraging work, causing labor supply issues that are hurting businesses.

What is clear is that the economy is nowhere near any mainstream estimate of full employment. And how the labor market recovery will look going forward — as the economy reopens and a huge number of displaced workers must reshuffle into jobs that suit their needs and interests — is wildly uncertain.

For the Fed, that unsure backdrop could serve as a validation of their policy approach. Officials have said they want to see realized progress toward their goals of maximum employment and stable inflation that averages 2 percent over time — not just forecasts for improvement — before dialing back their $120 billion in monthly bond purchases and, eventually, thinking about raising rates.

“The remaining big gaps to goals on the employment front and lower conviction in the momentum of the recovery in employment will underscore Fed policy patience and officials’ reluctance to take a strong rebound for granted,” Krishna Guha, an economist at Evercore ISI, wrote in an analysis after the Friday data release.

The Fed’s patient outlook differs somewhat from how the central bank has run monetary policy in the past. It has historically dialed back monetary support — policies that keep credit cheap and flowing — in anticipation of economic progress. The goal was to slow the economy before it overheated.

But officials updated their policy framework after inflation failed to rise as officials expected for years on end, raising the risk that price gains would slip into an economically damaging downward spiral. Still, Fed officials have faced recent criticism for their new, less forward-looking approach. Some economists have worried that it could make them too slow to react to changes in the economy.

Fed doctrine had long been “to take away the punch bowl before the party gets out of hand,” Lawrence H. Summers, a former Treasury secretary, said at a recent webcast event. “What we’ve now said is — we’re not going to do anything until we see a bunch of drunk people staggering around.”

April’s report could make it easier for the central bank to justify the new method, since it shows how challenging it will be to forecast the speed and tenor of the recovery from the pandemic, which is likely to proceed differently than economic healing after a typical recession would.

“This is a highly uncertain environment that we’re in,” Mr. Kashkari told Bloomberg. “We have a long way to go, and let’s not prematurely declare victory.”

Americans are coming back into the job market as the economy heals, pushing labor force participation — the share of people working or looking for jobs — slightly higher. Yet the key gauge of labor market vitality remains far below its level before the pandemic, and some economists question whether it will fully recover.







Jan. ’19

Jan. ’20

Jan. ’21



Source: Bureau of Labor Statistics·Seasonally adjusted.

The participation rate rose to 61.7 percent in April, data released Friday showed, up from 61.5 percent in March. For women, participation is at 56.1 percent, 1.7 percentage points below its February 2020 level. For men, it is at 67.6 percent, 1.6 percentage points below where it stood before the pandemic.

For men and women and across many racial and ethnic groups, participation seems to be trudging back, at best, after a robust bounce earlier in the recovery. The exception is for Black workers, who saw their very depressed rate jump higher last month. Even so, the Black participation rate remains 1.9 percentage points below its level before the pandemic.

The healing of the economy and the reopening of in-person businesses is spurring hiring and even complaints among employers that workers are hard to find. But it may take time for people who lost jobs during the pandemic downturn shuffle back into them.

If the labor force participation rate eventually recovers more completely, it is likely to limit how quickly the unemployment rate will fall. The jobless rate measures people who are actively looking for work and have not yet found it, and as people begin to search, it could prop that number up.

But it is unclear just how much labor force participation will recover, and the current leveling out does not bode well. Some former workers may never return.

Economists at Bank of America said in an April 29 research note that some 4.6 million workers were missing from the labor market compared to before the pandemic, and estimated that perhaps 1.2 million of those people had retired. The economists said another 700,000 might have left the labor market because they were struggling to find jobs that fit their skills.

“Our careful look at the U.S. labor market leaves us less optimistic that the labor force participation rate will return to pre-pandemic levels over the next two years,” the economists wrote. “It will take some time for these frictions in the labor market to work itself out with workers returning to school to acquire the necessary skills or businesses offering training programs.”

Employers say supplemental unemployment benefits are making it difficult to hire. But some former food-service workers are shifting to warehouse jobs or work-from-home positions.
Credit…Sarah Rice for The New York Times

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.

As the pace of hiring in the United States slowed strikingly in April, the jobs that were added during the month were concentrated in the leisure and hospitality industries. There, employers added 331,000 jobs, with more than half of that increase coming from hiring by restaurants and bars.

That was offset by losses elsewhere, and total employment for the month rose by just 266,000 — far shy of the 1 million jobs economists in a Bloomberg survey had anticipated.

The manufacturing sector shed 18,000 jobs, transportation and warehousing lost 74,000, and professional and business services lost 79,000 positions. Those professional job losses were heavily concentrated in administrative and support services and temporary workers.



–1 mil.


Jan. ’21

–196,000 since February 2020

7.6 million jobs in Feb. 2020



–1 mil.


Jan. ’21


15.6 million



–1 mil.


Jan. ’21


12.8 million

Business and professional services


–1 mil.


Jan. ’21


21.5 million

Education and health


–1 mil.


Jan. ’21

–1.2 million

24.6 million

State and local government


–1 mil.


Jan. ’21

–1.3 million

20 million

Leisure and hospitality

–1 mil.









Jan. ’21

–2.8 million

16.9 million

The data paint a somewhat confusing picture, one in which the in-person service sector is rebounding more or less as expected — if a bit more slowly than anticipated — as state and local restrictions lift and vaccines become more widespread. But at the same time, other sectors are shedding employees, for reasons that are not yet obvious.

Here are a few notable places where jobs were gained and lost:

  • Food services and drinking places: +187,000

  • Amusements, gambling, and recreation: +73,000

  • Accommodation: +54,000

  • Repair and maintenance: +14,000

  • Personal and laundry services: +14,000

  • Local government education: +31,000

  • Federal government employment: +9,000

  • Child day care services: +12,000

  • Real estate and rental and leasing: +17,000

  • Temporary help services: -111,000

  • Business support services: -15,000

  • Couriers and messengers: -77,000

  • Air transportation: +7,000

  • Motor vehicles and parts: -27,000

  • Wood products: -7,000

  • Durable goods manufacturing: +13,000

  • Retail trade employment: -15,000

Editorial staff members at Washingtonian are refusing to publish online on Friday after the D.C.-based magazine’s chief executive wrote an opinion piece about the future of remote work that generated an immediate backlash.

Cathy Merrill, the chief executive of Washingtonian Media, wrote in The Washington Post on Thursday that she was “concerned about the unfortunately common office worker who wants to continue working at home and just go into the office on occasion.”

Ms. Merrill wrote that by choosing to continue to work from home, employees are offering executives “a tempting economic option the employees might not like.”

Employees who are not in the office are not able to participate in what she called “extra” responsibilities, such as mentoring junior co-workers, helping a colleague, or celebrating a birthday, she explained, and managers may thus be less inclined to continue providing these workers with the status, and benefits, of being a full-time employee.

“If the employee is rarely around to participate in those extras, management has a strong incentive to change their status to ‘contractor,’” she wrote.

By doing so, she wrote, companies could save money by no longer having to pay for costs such as employee health care, retirement benefits, office space and parking fees.

Ms. Merrill apologized to her staff in an email on Friday and assured them that she would make no changes to employees’ benefits or work statuses.

“Washingtonian embraces a culture in which employees are able to express themselves openly,” Ms. Merrill said in a statement. “I value each member of our team not only on a professional level but on a personal one as well. I am sorry if the op-ed made it appear like anything else.”

The opinion piece generated an outcry among staff members at the magazine, many of whom posted the same message on Twitter criticizing Ms. Merrill’s words.

“As members of the Washingtonian editorial staff, we want our C.E.O. to understand the risks of not valuing our labor,” they wrote. “We are dismayed by Cathy Merrill’s public threat to our livelihoods. We will not be publishing today.”

Washingtonian staff, who are not part of a union, are still working from home. The magazine plans to have employees return to the office gradually beginning in the summer and then more fully in the fall.

The article and its original headline — “As a CEO, I want my employees to understand the risks of not returning to work in the office” — felt to some Washingtonian employees like their benefits or jobs were threatened, said a member of the editorial staff who asked to remain anonymous for fear of professional repercussions. The headline was changed to, “As a CEO, I worry about the erosion of office culture with more remote work.”

Customers dine outside at a restaurant in the Soho neighborhood of New York, New York on Tuesday, April 13, 2021.
Credit…Gabby Jones for The New York Times

The nation’s economic upheaval is subsiding now that Covid-19 vaccinations are spreading and restrictions are lifting. But the transition is rocky and filled with uncertainty.

Some employers, unable to fill positions, say the enhanced jobless benefits meant to cushion the pandemic’s blow are keeping people from seeking work. Many workers say they are staying off the job because of continuing health concerns or to care for their children or older family members.

But everyone’s story is personal. We’d like to hear yours — whether you are looking for work, looking for workers, or finding ways to get by.

We may reach out to you individually to chat some more about your answers, so please let us know if you’d be willing to share additional details with us.

We will not publish any part of your submission without contacting you first.

Credit…Robert Beatty

Today in the On Tech newsletter, Shira Ovide talks to Don Clark, who has written about computer chips for years, about the importance of chips, why the U.S. government is obsessed with making more of them in America, and how a new chip mania is a revenge for the nerds.