Based on the start of the year, many economists expected the April jobs report to continue the trend of rapid growth in numerous sectors as the world economy started to recover from the COVID-19 pandemic.
The economy added only 266,000 jobs in April, and the unemployment rate actually rose to 6.1% in April. This took the industry by surprise as the gains were about a quarter of what was expected.
Key insights from the jobs report:
- When compared to March (+770,000), and February (+536,000), a growth of 266,000 in April was considered quite anemic by analysts.
- In April, notable job gains in leisure and hospitality, other services, and local government education were partially offset by losses in temporary help services and in couriers and messengers.
- Growth in hospitality and associated industries was quite robust, accounting for a gain of 331,000 jobs.
What caused the slow-down? Experts are split on the underlying causes and solutions. One reason may be that the economy is in worse shape that previously thought. Alternatively, a year of shut down may simply mean that it will take time for the economy to come back online. There are also the logistics of workers getting fully vaccinated and returning to the workforce if they have left it, including arranging for child care.
More details from the jobs report:
- The loosening of pandemic-related restrictions sparked a growth of 331,000 jobs in leisure and hospitality. More than half of the increase was in food services and drinking places (+187,000), amusements, gambling, and recreation (+73,000), and in accommodation (+54,000). We continue to see strong demand for workers in those areas.
- Although leisure and hospitality has added 5.4 million jobs over the year, employment in the industry is down by 2.8 million, or 16.8 percent, since February 2020.
- In April, employment increased by 44,000 in the other services industry, with gains in repair and maintenance (+14,000) and personal and laundry services (+14,000). Employment in other services is 352,000 below its February 2020 level.
- Local government education employment increased by 31,000 in April but is 611,000 lower than in February 2020. Federal government employment increased by 9,000 over the month.
- As people return to work and change living situations, employment in in social assistance is rising by 23,000 in April, with about half of the increase in child day care services (+12,000). Employment in social assistance is 286,000 lower than in February 2020.
- Employment in financial activities rose by 19,000 over the month, with most of the gain occurring in real estate and rental and leasing (+17,000). Employment in financial activities is down by 63,000 since February 2020.
- Professional and business services was hard hit in April, especially in regards to temporary help services, which declined by 111,000 in April and is 296,000 lower than in February 2020. Business support services lost jobs in April (-15,000), while architectural and engineering services and scientific research and development services added jobs (+12,000 and +7,000, respectively)
- Retail trade held steady in April (-15,000), following a gain in the prior month (+33,000). In April, employment declined in food and beverage stores (-49,000), general merchandise stores (-10,000), and gasoline stations (-9,000). These losses were partially offset by employment increases in sporting goods, hobby, book, and music stores (+20,000); clothing and clothing accessories stores (+10,000); and health and personal care stores (+9,000). Employment in retail trade overall is 400,000 lower than in February 2020.
- Employment in health care changed little in April (-4,000), as a job gain in ambulatory health care services (+21,000) was largely offset by a job loss in nursing care facilities (-19,000). Health care employment is down by 542,000 since February 2020.
Stay tuned for more analysis for the May jobs report coming in a few weeks. See past jobs reports here.
Edouard Thoumyre is a seasoned executive recruiter with over 17 years of experience in executive search, as the Founder and Managing Partner of ACCUR Recruiting Services. Specializing in the Consumer and Luxury Goods industries, he has a proven track record of placing senior level and C-level executives in family, private equity-backed, and Fortune 500 companies in the beauty, wine & spirits, watch & jewelry, home goods, and tobacco industries, among others. Edouard Thoumyre holds a master’s degree in Entrepreneurship from HEC Paris (#1 European Business School, Financial Times rankings) and a master’s degree in industrial engineering from Centrale Lille (a top 10 French engineering school). ACCUR Recruiting Services has been recognized as a Forbes Top 100 executive search firm since 2018.
Edouard Thoumyre and his firm, ACCUR Recruiting Services, have been featured in numerous publications such as WWD, Business Insider, Newsweek, CPG Specialist, Yahoo Finance, Nasdaq.com, Marketplace by NPR, Business of Fashion…