U.S. hiring hits a major speed bump

It's a jobs number that's causing a lot of head scratching on Wall Street and Main Street.

U.S. employers added only 266,000 new jobs in April, according to data released Friday by the Labor Department.

That's a sharp slowdown from the 770,000 jobs created the month before.

April's hiring number was way below the consensus forecast that had some economists predicting the number could come in as high as 1 million or more.

So what's behind the big miss?

Some employers say they are facing a labor shortage for a number of reasons brought on by the health crisis including parents who can't go back to work because they don't have adequate childcare, early retirements, people who still are nervous about their health and are afraid to return to a work environment, and potential workers who are choosing to stay home because of extra jobless benefits. The additional government unemployment assistance of $300 runs out in September.

But Nick Bunker, Head of Research - North America at jobs website Indeed, doesn’t think that tells the whole story.

"I think what we saw in this data is that the industries that add the most jobs were lower-wage industries that tend to have fewer work from home opportunities. So, that is sort of sectors that would have seen the biggest decline in job gains if that labor shortage story were the predominant impact right now. I think we're going to need to see many more months to really get a handle on what's going on here."

Economists point to the global chip shortage as another likely factor behind April’s somber jobs report. Some factory floors have reduced operations due to lack of supplies, which economists say, could explain a drop in manufacturing jobs last month.

The unemployment rate unexpectedly rose to 6.1 percent in April.

This report is likely to support the Federal Reserve's pledge to keep supporting the economy until it is sure the damaging effects of the health crisis have totally passed.