Semiconductor shortages dragged down April employment, other takeaways from a dive into the jobs data

The April jobs report, released by the Bureau of Labor Statistics on May 7, generated considerable attention due to the 266,000 jobs added being far less than anticipated. Contributing to this topline number are quite a few trends moving in different directions, including a severe decline in automotive manufacturing employment — likely driven by the global semiconductor shortage — increasing restaurant and R&D employment, and declines in part-time work. Ultimately, the April employment data suggest a far more complex portrait of the economy than what is being covered in many sources.

Motor vehicle manufacturing in decline due to chip shortages

Employment in motor vehicle manufacturing fell by 27,000 in April from March. The number of seasonally-adjusted employees in the sector is now 868,000 workers, which is well below the February 2020 level of 986,000.

Employment in the sector has been stagnant in recent months, and the shortage of semiconductor chips appears to be a leading cause. In early April, GM and Ford announced plans to temporarily shut down production lines, possibly affecting the survey’s reference week (which includes the 12th of the month). Reporting indicates that these shutdowns have continued, in many cases, into May, which will continue to hold down employment in the sector. Overall, the chip shortage is expected to cause the industry to produce nearly four million fewer vehicles in 2021 than it did in 2020.

Temps and couriers were the biggest drag on employment

Temporary help and couriers saw 111,000 and 77,000 fewer jobs, respectively, in April compared to March. These were the two industries with the greatest losses (food and beverage stores were third with -49,000 jobs, followed by automotive manufacturing) and nearly washed out half of the total private, nonfarm employment gains for the month. The temporary help industry now employs 2.6 million people, which is about 300,000 below its February 2021 level. The courier industry may be in for a long decline — the April 2021 level of 1 million employees is still 118,000 above its pre-pandemic level and nearly twice the number of employees a decade ago (533,000 in April 2011).

Restaurant employment is surging

Food services (and drinking places) employed an additional 187,000 people in April than in March, significantly greater than the gain of 100,000 seen in March relative to February. While the total April 2021 employment of 10.6 million remains well below February 2020’s level of 12.3 million, the sector accounts for 86 percent of the total increase in private, non-farm employment in April.

Market-induced part-time work declining

The number of people who report working part-time due to slack work or business conditions declined by 643,000 people in April from March (in non-agricultural sectors). The new total of 3.9 million people is still well above the February 2020 figure of 2.8 million, but is the lowest level since the beginning of the pandemic.

Scientific R&D employment reaches new high

More than 805,000 people were employed in scientific R&D in April 2021, an increase of nearly 7,000 from March, and 42,000 more than in February 2020 This is the highest level of employment in the BLS historical data released with the April jobs report, which dates back to January 2011 (when employment was about 627,000).

A note on the data: The figures in this report are seasonally-adjusted and preliminary data from the April 2021 monthly employment situation report by the Bureau of Labor Statistics. Additional details on the methodology are available at bls.gov, as is a detailed discussion of the impacts of COVID-19 on employment data collection and reporting.