Jobs Numbers and Stock Market: Live Updates


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.

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“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. “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,

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,” Ms. Swonk said, noting there is still a lot of skittishness on the part of employers and workers. “I don’t view this as terribly troubling or distressing.”

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.

–20

–15

–10

–5 million

–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.

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.

Construction

–196,000 since February 2020

7.6 million jobs in Feb. 2020

Business and professional services

Education and health

–1.2 million

24.6 million

State and local government

–1.3 million

20 million

Leisure and hospitality

–1 mil.

–2

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–5

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–8

–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

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.

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64%

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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.

An unexpectedly weak report on hiring in the United States rippled through financial markets on Friday, with yields on government bonds tumbling and stocks holding a small gain on Wall Street.

Employers added 266,000 workers last month, the government reported, far below economists’ expectations of an increase of nearly 1 million new positions. The report also revised March’s job gains lower. The dramatic slowdown in hiring could unwind concerns about overheating in the economy.

The primary barometer of those worries, yields on government bonds, tumbled in the minutes after the report.

As investors reassessed expectations about how soon the Federal Reserve might need to wind down monetary support, the yield on 10-year U.S. Treasury notes plunged as low as 1.46 percent, down 10 basis points, or 0.1 percentage point. It then rebounded to about 1.53 percent. 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 those yields this year. As they climb, they make risky investments less appealing. But on Friday, the sudden drop in yields lifted technology stocks.

The Nasdaq composite rose about 0.7 percent in early trading, while the broader S&P 500 rose about 0.3 percent. Stock benchmarks in Europe held on to their gains from earlier. The Stoxx Europe 600 and Britain’s FTSE 100 each rose about half a percent.

“If this slower pace of job gains persists then the Fed are likely to start raising rates later than markets had been expecting,” Mike Bell, a strategist at JPMorgan Asset Management, wrote in a note to clients. “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.”

Despite the surprise, the April jobs report did show that hiring in the U.S. economy continues, and more opportunities are bubbling up: Job postings on the online job site Indeed are 24 percent higher than they were in February last year.

Whether the U.S. depends on open pit mines or a more environmentally friendly option called lithium brine extraction will depend on how successful groups are in blocking projects.
Credit…Gabriella Angotti-Jones for The New York Times

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.

Investors have put more than $475 million into Cerebras, a start-up that makes artificial-intelligence processors.
Credit…Jessica Chou for The New York Times

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.



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