“Real” unemployment rate fell slightly in April but jobs report basically dismal

Written on May 12, 2021

The U.S. economy added only 266,000 jobs last month, according to the Bureau of Labor Statistics, far below estimates predicting an increase of 1 million payrolls. The unemployment rate rose to 6.1% from 6%, and a handful of industries shed jobs despite the easing of economic restrictions.

While nearly all gauges pointed to a slowing recovery, an alternative measure of nationwide unemployment improved slightly from its March level. The "real" unemployment rate previously mentioned by Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen fell to 8.3% in April from 8.7%, by Insider's calculations. The rate includes workers who have been misclassified as having a job while on furlough and Americans who've dropped out of the labor force since February 2020.

The decline suggests about 13.6 million Americans are still jobless despite the economy steadily recovering through the spring. The number of Americans misclassified as holding a job while actually furloughed dropped, dipping from 636,000 to 558,000.

The U-6 rate, which includes those employed part-time for economic reasons, and those marginally attached to the labor, dropped again in April. It went from 10.9% in March to 9.9% in April; while that's yet another dip, the rate is still nearly in the double digits.

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