The April Jobs report fell wildly short of expectations for myriad reasons.  Unpacking these numbers reveal the crosscurrents in the U.S. economy.

The Good

The hardest-hit sectors during the COVID pandemic were dining, hospitality and entertainment.  Low-wage workers concentrated in them suffered significant job loss.  They were primarily sheltered from economic devastation by generous unemployment benefits. With COVID restrictions relaxing in all but coastal in the West and North-East, their jobs have been coming back.  More than half of the increase in employment (187K) was in food services.  Entertainment clocked in at 73K jobs and hospitality at 54K.  That’s the good news.

The Bad

Professional services, transportation/warehouse, manufacturing, and healthcare were all down after leading employment gains during the pandemic.  Construction, a Spring and Summer perineal leader, stayed flat, hampered by lack of building supplies and supply chain issues. Auto and other industries lagged due to a microchip shortage that will not be ending anytime soon.

The Ugly

You would have to go back to 1996 to find a bigger miss (4-sigma) on job growth expectations.  The administration’s premature victory lap proved ill-advised.  Unemployment moved up to 6.1%, while at same jobs are going begging in sectors leading job growth in April.

Crosscurrents And Their Navigation

Two large labor pools remain mainly on the sidelines, both for reasons related to COVID policy decisions. 

Low-wage workers in many states can make more on state unemployment benefits (state and federal) than they can on the job.  Federal unemployment benefits worth $300 per week will continue until September 4; it may prove challenging to lure them back to work until the 4th quarter.  All bets are off if the administration extends benefits through the end of the year.  Meanwhile, successful work habits such as punctuality, focusing on the day’s work and delivering consistent results atrophy with inaction.

COVID policy decisions devasted female employment.  The lockdown of almost all businesses but those deemed essential or those whose workforces could operate remotely from home.  Females represent a small percentage of essential business workforces except for healthcare, grocery, and big-box hardware and lumber.  Those in professional services could work from home if they had access to technology and workspace.  Most damaging was the closing of most public schools, many of which remain closed.  Childcare demands fell instantly upon households, and almost immediately, mothers returned to the home.  Unless summer childcare, day camps, and the like operate at total capacity, they may remain at home until August if public schools open.

Finally, many people in jobs involving arm’s length or less contact with others have become convinced these jobs are dangerous and therefore undesirable.

Through at least the 3rd quarter, employers will likely have to succeed with the workers they have.  Retention will be critical, and discretionary effort essential.  You will have to know your people to their very core to pull this off successfully.  I use the MPO tool in my consulting practice to reveal the motivational drivers of employees coupled with proven methods of getting the very best from a workforce.  Please contact me for a free demonstration.