April's terrible jobs report shows the 2019 economy is not coming back and that's a problem

• The US economy only added 266,000 jobs in April, far less than economists' predictions of 1 million.
• While leisure and hospitality showed the biggest gain, they were still far below pre-pandemic norms.
• The jobs report signals that the reopened economy won't look like 2019's for a long time.

April's jobs report is a big yikes.

The US economy only added 266,000 nonfarm payrolls last month, the Bureau of Labor Statistics announced Friday. That's way less than 1 million, the median estimate for payroll gains by economists surveyed by Bloomberg. While it was the fourth consecutive month of payroll increases, it was the smallest since September.

As a Morgan Stanley note from economist Robert Rosener's team stated, "The expected 'string' of strong jobs reports has started to look more like a modest trail of crumbs."

In the process, unemployment has risen again, albeit slightly from 6% to 6.1%, it was the opposite direction of the forecasted decline to 5.8%.

Job growth was strongest in the leisure and hospitality sector, adding some 331,000 payrolls. More than half of this increase was linked to hiring in food services and bars, offsetting declines in other sectors such as temporary help services.

The staggering numbers indicate that while the economy is still set to come roaring back to life this year, it won't look anything like it did in 2019, and jobs may not come back at nearly the same rate as consumer spending ramps up.

Consumer spending recovering faster than jobs

The US economy is on the verge of a glow-up. Vaccines are increasingly finding their way into arms, big cities are reopening, and Americans are sitting on $2.6 trillion in excess savings, between three stimulus checks and a decline in discretionary spending.

They're already swiping their cards on things like outdoor activities, transit, restaurants, clothes, and beauty as they prepare for what Insider reported is shaping up to be a "hot vaxx summer." Economists expect this to continue, predicting that a lockdown lift will see the biggest boomtime in a generation.

But the return of consumers to the economy hasn't yet been matched with blowout job growth, which is putting the predicted post-pandemic boom in a new light. The US is still down roughly 9.8 million jobs from its pre-pandemic peak. While relaxing restrictions is expected to help narrow this gap within the incoming months, April's payrolls spark concern over how easy these gains will be.

The disruption to the experience economy is still taking its toll. Leisure and hospitality may have seen the most job gains in April, but employment in certain industries of this sector still hasn't reached pre-pandemic levels.

Hallmarks of the 2019 economy that suddenly went on pause last year - the payrolls of motion picture and sound recording industries, travel arrangement and reservation services, performing arts and spectator sports, and accommodation - were all still at least 25% below where they were before the pandemic. Hollywood and travel may not look the way they once did on the jobs front - or not for years, meaning job gains will have to come from somewhere else.

Reopening to a reshaped economy

Experts have been warning of millions of jobs permanently lost to the pandemic, Insider's Ben Winck reported.

Countries will need to "think well in advance" of what a post-pandemic economy will look like so as to add jobs where they're going to be, Kristalina Georgieva, managing director of the International Monetary Fund, said in a Thursday video conference. Federal Reserve Chair Jerome Powell also noted that millions of Americans will struggle to find work as they acclimate to a permanently changed labor market.

"The real concern is that longer-term unemployment can allow people's skills to atrophy, their connections to the labor market to dwindle, and they have a hard time getting back to work," he said in the conference. "It's important to remember we are not going back to the same economy, this will be a different economy."

However, some experts remain optimistic. Jason furman, former top economist to former president Barack Obama, said on MSNBC Friday that he expects hiring to pick up during the summer. "I think we're gonna see a hot summer in the labor market," he said.

Lockdown lifts are just beginning and vaccinations are still rolling out. That is all to say: it's still early on. But that we're in the first stages of a recovery means that the 2019-vintage experience sector of the economy won't snap back instantaneously, and that other industries are still grappling with the worker effects of not having properly estimated demand for goods during the pandemic.

April's jobs report was a strong signal that recovery won't be as simple as going back to the economic playbook from the before times. Instead of seeing an economy restored to what it once was, we might see an economy reshaped into something new.