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Weekly economic review & outlook April job gains fall far short of expectations

May 10, 2021

You Need to Know

Week in review

Nonfarm payrolls rise by far less than expected

Seasonally adjusted nonfarm payrolls grew by much less than expectations for April, while the unemployment rate rose for the first time in a year.

ISMs edge lower but still show robust growth

The ISM manufacturing and services indices both moved a bit lower for April but remained well into expansion territory – signaling that growth remains solid.

Week Ahead


A big jump in trend CPI inflation expected for April

While the monthly gain in the CPI is expected to slow as the recent runup in oil and gas prices moderated last month, the 12-month trend rate should jump to around 3.5 percent – the fastest pace since 2011.

Another strong – albeit more modest – month for retail sales

Powered by the already-reported surge in light vehicle sales, we expect that total retail sales grew at a solid pace for April – although much less rapidly than in the prior month.

Seasonally adjusted nonfarm payrolls grew by a disappointing 266,000, falling far short of the consensus expectation of one million. Most of the job gains came from leisure and hospitality – likely as a result of diminishing government-mandated restrictions – which had its sixth best month ever. On the other hand, transportation and professional and business services each saw large declines in payrolls, while education services also contracted. Jobs in the goods sector also declined, due entirely to a contraction in manufacturing.