(Updated with details, reaction of the marches)
by Lucia Mutikani
WASHINGTON, May 7 (Reuters) – The rebound in job creation in the United States suffered a sharp and unexpected slowdown in April, with a shortage of workers limiting the hires that companies need to cope strong demand against the backdrop of an economic recovery.
The Labor Department recorded 266,000 non-farm job creations last month, while economists polled by Reuters predicted an average of 978,000.
Those for March were revised down to 770,000 after an initial estimate of 916,000.
The April report shows a drop in temporary jobs as well as a drop in employment in manufacturing and distribution, which could reinforce criticism of the large unemployment benefits granted by the government.
These were extended as part of the $ 1.9 trillion support plan adopted by Congress in March to deal with the consequences of the pandemic.
“It’s probably a temporary accident because the job market continues to normalize and numbers are expected to rebound with the progress of vaccinations, with those staying at home on benefits realizing they will expire at the end of summer, ”comments Quincy Krosby, market strategist for Prudential Financial.
The market reaction, brutal at first and then much more moderate, seems to support the thesis of a temporary slowdown.
THE 10 YEAR YEAR’S PERFORMANCE FALLS THEN CALCULATES
The yield on 10-year US government bonds fell after the statistic was released, falling to 1.469%, its lowest since early March, before falling back to 1.53%.
On the stock market, the Dow Jones opened lower but quickly turned upward (+ 0.4% at 2:20 pm GMT) to enrich its collection of records.
The S&P 500 is also in the green (+ 0.8%) and the Nasdaq, with a strong technological component and very sensitive to rates, takes 1.4%.
The decline of the dollar, which loses more than 0.5% against a benchmark basket, continued on the other hand.
The unemployment rate, calculated on the basis of a separate survey from the one on job creation, rose to 6.1% while the Reuters consensus gave it down to 5.8% after 6.0% on last month.
But this indicator is not considered, in the United States, as a faithful measure of the evolution of the labor market because it is biased by the fact that some of the people questioned to calculate it are wrongly classified as “employees. but absent from their work “, which results in him being undervalued.
These numbers are unlikely to alter expectations for strong growth in the US economy this year.
They could, however, at least temporarily allay fears of a rise in sovereign debt yields and a runaway inflation that would force the Federal Reserve to tighten its policy prematurely.
The Fed has hinted that it will let inflation temporarily exceed its 2% target and thus tolerate some overheating in the economy to help the labor market return to pre-health crisis levels. (French version Laetitia Volga and Patrick Vignal, edited by Jean-Michel Bélot)
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