Analysts shocked as jobs report misses expectations by a mile

U.S. employers added 266,000 jobs in April, well short of the million projected by economists.
4:11 | 05/07/21

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Transcript for Analysts shocked as jobs report misses expectations by a mile
That jobs report today the US added 266000. Jobs in April well below what analysts were expecting. And the unemployment rate also rose to six point 1%. ABC news business correspondent Deirdre Bolton is here with more on all of this due to this report was pretty disappointing to say the least analysts were expecting this gain. Of about a million jobs so what happened here why did they get it so wrong. They and first and foremost every one was surprised there was not one analysts not one economist that I spoke with today who expected this disappointing a level either on the number of jobs added. Or on that employment rate so the feedback that I'm getting is that our recovery is going to be clunky. One economist talked about learning Sara drive his stick shift the manual shift its or not it inches be able to switch back on the light and go full steam ahead with our economic recovery. A few factors at play even the Fed Chairman Jerome Powell spoke about these. Saying in fact there are still people who have child care issues they may not be able to go back to work because they still have young children at home. There are still issues where people may be concerned even though we are managing the pandemic batter. Still not every single person feels comfortable being in an office or a store or a restaurant or wherever they work. And then there are these supply chain issues women's hockey a lot about semiconductors. And how that is affecting slowing production if you like particularly in the auto sector also in some of the electronics sector. So there are numerous. Let's say a Lance if you like Diane that are contributing. So what we consider the biggest downside surprise as one analyst told me that he has seen. Since at least 1998 when he's back covering all of SL a lot to monitor here. Most economists the big news good news is that they think long term we will trend op. It's just not going to be. Straight out Diane and you get a lot of businesses that complain about a shortage of workers you talk to a few economists about that today what did they tell you. So Michelle Meyer who is head of US economics at Bank of America she said that point blank she said at the biggest reason in her view for this April disappointment is the shortage of workers. So she is certainly one person who's being very clear on that. Anecdotally we have spoken with tons of small business owners who are just telling us that I spoke with more than a few restaurant owner Seng was sent. I'm cutting days I'm cutting meals I'm cutting menu items I can't get people to come in and work. And a one of the reasons again anecdotally that people are telling me is that with state and federal support. Some for some people it just makes more sense for them to be home right now. In general we saw some interesting patterns with sectors as well we're employers are starting to offer more mighty one restaurant owner that I spoke with. Said he is actually offering a thousand dollar signing bonus. Two dishwashers and so this is how desperate in some cases business owners are to get workers back. But as I mentioned just that the timing of all factors lining up it's just going to be a little clunky for wild and and neither one bright spot in all this was that the strongest job growth last month. Was in the leisure and hospitality sector why that's so important. Well it's so important because collectively what we all spending is two thirds of our economic activity so if you and I feel safe and comfortable. Going to movies and we felt comfortable sitting in bars and restaurants and traveling patronizing hotels getting on airplanes. That really changes is so much what we are spending. Directly with those businesses and then all the businesses around so that was clearly as you mentioned and very much of the bright spot. Obviously the biggest losses were in temporary hiring also in manufacturing which had been gaining steam pretty nicely. And then also storage businesses so those were the ones that really stop the biggest attractions. If you like the jobs of the biggest breaks back clearly leisure and hospitality. And we feel good about that because that is certainly one of the ones if not V one singular that has been hit absolutely the hardest. In these past twelve to 14 months I am. Parent Deirdre Bolton our business correspondent thanks you're here.

This transcript has been automatically generated and may not be 100% accurate.

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