Treasury Secretary Janet Yellen comments on the U.S. jobs data for April

The U.S. Bureau of Labour Statistics said on Friday that the shortage of raw materials and workers resulted in a surprise decline in job growth last month. Nonfarm payrolls jumped only by 266 thousand jobs in April versus close to a million additions expected.

For the first time since the start of the COVID-19 crisis, new claims for the government-funded unemployment benefits dropped below 500,000 in April. The unemployment rate, however, stood at 6.1% compared to 5.8% expected.

The U.S. jobs data for April highlights continued progress

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Treasury Secretary Janet Yellen acknowledged that the jobs data on Friday hints at a long way back to full recovery but also expressed confidence that it highlighted continued progress as well.  

“We’ve added, on average, over half a million jobs during the past three months. And we saw a promising growth of 331 thousand jobs in leisure and hospitality. Last month, the labour market expanded, as more people reported they are looking for work. Hours are increasing, and the share of workers pushed into part-time jobs is declining. I believe we will reach full employment next year.”

Yellen also highlighted in her statement on Friday that the unemployment rate doesn’t account for hundreds of thousands of Americans that are not yet looking for work. Women labour market participation in the U.S., she added, has slumped back to the levels last seen in the late 80s due to the pandemic. Male labour participation, on the other hand, has never been this low in the past 70 years.

American Families Plan aims at recovering labour market participation

The Treasury Secretary said that lack of support for Americans raising children or providing care for the elderly is a notable reason for the decline in labour market participation. Yellen said:

“Between February and April of 2020, 4.2 million women dropped out of the labour force, in large part due to an unexpected caregiving burden. Nearly 2 million have not yet returned. The challenge before us is to help these 2 million to return to the labour market. This is what President Biden’s American Families Plan aims to achieve.”

Yellen also expressed confidence that recovery will remain on track in the upcoming months. She acknowledged that it might be volatile from month to month and one should never take one-month data as an underlying trend, but was positive that the jobs data for April was stronger than headline number looks.