U.S. | Modest job gains in April suggest a full-speed recovery is still elusive

Summary

April’s job creation was shockingly below expectations. The unemployment rate increased slightly as more people entered the labor force encouraged by vaccinations and reopenings. Overall, labor market conditions suggest that the recovery is still vulnerable.

Key points

• Key points:
• The pace of job gains slowed down significantly in April
• Payroll varied across industries with strong gains in those that were severely impacted by the pandemic, and modest declines in sectors experiencing constraints
• An increase in labor force participation highlights the positive effects of vaccinations and reopenings
• Labor market conditions still call for ongoing fiscal and monetary stimulus
• No changes to our Fed outlook of tapering in 2022 and liftoff in 2023

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