Job Growth Underwhelms; U.S. Gains Only 266,000 Jobs in April

May 7, 2021
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Author: Jay Denton

Disappointing figures given close to a million jobs were expected.

April’s employment gain of 266,000 fell below expectations, despite overall optimism in the U.S. economy. Upon the anniversary of the biggest job loss in U.S. history, more momentum in job creation was expected this month.

April 2021 Jobs Report Numbers and Labor Report

One year ago, the U.S. lost 20.7 million jobs in April 2020 alone, equivalent to 13.8% of total employment at that time. Combined with significant job loss in March 2020, the U.S. suddenly found itself with 22.4 million fewer jobs in the blink of an eye.

Fast forward a year, and the market had been on an upswing after 770,000 jobs were added in March, and unemployment insurance claims dropped during April. Consumer confidence and GDP outlook continue to improve.

Still, the U.S. has 8.2 million fewer jobs than before the pandemic. Given the BLS surveys during the first half of April, there is hope more jobs were created later in the month, which could boost the May numbers. Either way, this morning’s report missed the mark on expectations.

The Talent Demand

Maintaining March’s robust pace of job gain was going to be challenging at some point, but it was expected to be a few months away. We are seeing an earlier, more significant slowdown. The challenge for employers is that almost 3.5 million fewer people are participating in the labor force than before the pandemic. Without these people rejoining the workforce, the pace of hiring will slow simply due to a lower supply of labor.

Additionally, former workers currently without jobs are delaying their return to the workforce because the additional unemployment benefits pay more than their previous wages. This trend will make hiring difficult, particularly for the leisure and hospitality sector, which will experience a surge in demand from summer travel but will find it difficult to fully staff their operations.

Candidate supply also remains extremely tight for roles in technology, architecture and legal – professions that were already facing a talent shortage before the economy kicked back into gear the last few months. Prior to the pandemic, unemployment rates were at 50-year lows, and some high-skilled occupations have already fallen below 3.5%. 

Business Impact

Recent momentum has improved the near-term outlook. Despite April’s numbers, the outlook for 2021 remains strong, and it is still expected that the U.S. will add a significant number of jobs back to the economy. After March’s jobs report, ThinkWhy’s talent intelligence software, LaborIQ®, estimated an additional 822,000 jobs would be added back to the economy in 2021, bringing the annual estimate to 5.4 million for the year.

While April’s number is disappointing, it will take another month of moderate growth to change that expectation. Consider, the real hiring wave was expected to hit during the second half of the year, and the second quarter will still show strong results compared to original predictions.

While the economic outlook is positive, talent acquisition professionals still face challenges filling roles until the supply of workers increases significantly.

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Local Markets Adding the Most Jobs

While the U.S. employment recovery is widespread, the pace varies across the nation. The following U.S. locations recovered the most total jobs in the first quarter of 2021.

To note, data by metro through April will be available May 21.

Year-to-Date Job Gain for 2021 through March



Many of these cities were also among the hardest hit at the onset of the pandemic-induced economic fallout and remain 5% to 11% under their pre-pandemic employment levels. Further, industry recovery will be based on varying economic influences. As a result, each city will be impacted differently.

Continue reading for the top 10 best-performing job markets experiencing increased hiring volume in recent months.

Industry Outlook

Recently, the U.S. has experienced an incredible amount of economic growth. The pace of recovery will vary across cities, dependent upon their respective talent supply and industry growth.

Here is a look at the economic recovery timeline across the major sectors.

Industry Performance & Recovery

April’s jobs report indicates the most job gain was in Government and Leisure and Hospitality.

“We still expect a strong summer of hiring, and the economy is setting up for a well-rounded recovery as businesses reopen and consumer spending widens to service and hospitality sectors. Restaurants, hotels, and entertainment venues are poised for a sharp rise in demand, but the ability to hire fast enough will be challenging,” said Jay Denton, chief analyst for ThinkWhy.

LaborIQ jobs report April 2021 industry infographic

Keep reading for LaborIQ’s industry forecast and expected timelines for their return to pre-pandemic employment levels.

2021 Recovery

  • Construction | Disruption in supply chains continue to delay construction projects and drive up costs, which may slow job growth in the industry. There are still 196,000 jobs to recover in this sector.

  • Financial Activities | Sales financing and real estate credit have more jobs now than prior to the pandemic due to record-breaking home sales and rising automobile purchases. In fact, vehicle sales hit a new high in April, with over 19 million new vehicles sold, per the Commerce Department. While the rental and leasing sector, which includes automobile leasing, was heavily impacted by the pandemic, increased summer travel could significantly boost job growth.

2022 Recovery

  • Healthcare | In Q1 2021, consumer spending on healthcare services slightly exceeded its pre-pandemic level for the first time, after being down as much as 20% in 2020.

  • Professional and Business Services | So far professional and business services has added over 171,000 jobs this year. At this pace, all lost jobs could be fully recovered by the end of this year, instead of 2022. However, with less impact to high-skilled roles, this cadence of job gains could be hard to sustain, especially with so many people still out of the labor force.

  • Trade, Transportation and Utilities | Driven by consistent consumer spending on goods, freight transport has hovered steadily around its pre-pandemic level, according to the Bureau of Transportation’s (BTS) Transportation Services Index. While the recent number of flight bookings has grown tremendously, the total number of people flying on May 5, 2021 is still a million fewer than the total on May 5, 2019.

  • Manufacturing | The Institute for Supply Management® Manufacturing PMI®, which measures order activity at U.S. factories, reported April’s PMI at 60.7. While down from March, it is still in a range that indicates expansion. The industry’s productivity has been slowed by material shortages, despite robust demand for goods, such as appliances and automobiles.

2023 Recovery

  • Information | Motion picture box offices had a better April compared to a year ago, but the industry remains well below activity and revenues. However, given changing restrictions and risk, production companies can now begin activities to help steer employment growth in the sector.
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2024 Recovery

  • Government | State and local governments spent more on services during the first quarter of 2021, exceeding the pre-pandemic levels in Q4 2019. The increase was likely aided by a cash infusion from the recently enacted American Rescue Plan passed in March, which allocated $350 billion in federal aid to state and local governments. Overall, a quicker pace of recovery is expected than in previous forecasts, due to plans for higher spending.

  • Leisure and Hospitality | Over 600,000 jobs have been added in 2021, as this service-based industry benefits from cash-saturated consumers and pent-up demand. OpenTable seated diner data shows more foot traffic to restaurants. Hotel occupancy reached 57.3% toward the end of April, according to a recent Hotel News Resource article.

2025 Recovery

  • Mining and Logging | Refinery capacity has not quite hit its lowest point, as it had prior to the pandemic. However, higher than expected demand for petroleum will likely increase oil prices. Though summer has not yet begun, demand for fuel is expected to be high as vehicle miles traveled hit new highs in April, according to the Bureau of Transportation.

LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.