Only 266,000 jobs were created last month instead of the million expected for the second largest miss in history (March 2020 being the worst). The unemployment rate actually rose from 6.0% to 6.1% instead of declining to 5.8% as expected. However, labor force participation inched up from 61.5% to 61.7% and the underemployment rate actually went down from 10.7% to 10.4%.1 It makes sense that the underemployment rate goes down with those wanting to work more being able to get full time jobs as employers scramble to fill positions. It is discouraging to see too few people coming back into the workforce.

This is an incredibly disappointing economic data point and supports the Federal Reserve’s concern over employment. However, the economy is rebounding so strongly, the recovery in jobs is a matter of when and not if it will happen. This probably means that May or June’s growth in jobs will be a blowout number to the upside. It may all depend on when the special unemployment payments and savings from stimulus checks run out before more people are willing to go back to work. So while yields are lower this morning, don’t expect that to last long.


1. Bureau of Labor Statistics

Author Portrait
Bryce Doty is a Senior Vice President with Sit Fixed Income and Senior Portfolio Manager of the taxable bond portfolios for the firm’s custom separately-managed accounts, private investment funds, and mutual funds. Bryce oversees the firm’s team of taxable bond managers, analysts, and traders.