April’s disappointing employment report doesn’t change the upbeat outlook for the U.S. labor market amid strong consumer demand, Federal Reserve officials said.

“We still think, despite these frictions, that job growth will be strong,” Federal Reserve Bank of Dallas President Robert Kaplan said Monday in an interview on Bloomberg Television with David Westin, adding that employers reported problems in attracting workers despite offering higher wages. “You will see fits and starts like we saw here. We still think the trend is going to be strong job growth and recovery, particularly as leisure and hospitality sectors and others open up.”

A Labor Department report published Friday showed just 266,000 Americans were added to nonfarm payrolls in April, well below the increase of 1 million that had been predicted by the median forecaster in a Bloomberg survey.

Kaplan’s confidence on the outlook for the U.S. job market was echoed by other policy makers on Monday. San Francisco Fed chief Mary Daly told Yahoo! Finance: “I remain bullish about the future. But we’re not there yet, and we’re going to have some fits and starts.”

Charles Evans of Chicago said he was optimistic that despite the sluggish April report, the U.S. labor market is “going to get back up to very strong numbers” in coming months.

‘Head Scratcher’

“I think we’re on our way but April was a bit of a head-scratcher,” he said. “We’re looking for employment to continue to grow month after month. I think we’re looking for a couple of those million-a-month employment reports.”

Both Daly and Evans are voters this year on the rate-setting Federal Open Market Committee.

Kaplan, who isn’t a policy voter in 2021, cited a shortage of affordable childcare — which makes it harder for parents to go back to work — as well as a pickup in the pace of retirement and the disincentive of enhanced unemployment benefits, as impediments to hiring.

“Demand for businesses to hire is greater than the growth in employment,” he said. “We want to incentivize people to come back to the jobs they left or other jobs.”

Relief Expiration

The extra $300 a week in jobless benefits being paid to some Americans as part of COVID-19 relief efforts expires in September. Governors in Montana, South Carolina, and Arkansas plan to terminate the benefits earlier, citing worker shortages. The U.S. Chamber of Commerce has also called for ending the supplement.

The U.S. central bank is currently buying $120 billion of bonds each month and has said it will continue to do so at that pace until “substantial further progress” has been made toward its employment and inflation objectives.

Kaplan repeated that as the economy approached this threshold it would be healthy to start a discussion on tapering “sooner rather than later. I’m not putting a calendar date on it — because I’m seeing excesses and imbalances and side effects of some of these purchases.”

Fed Chair Jerome Powell told reporters during an April 28 press conference that it would take “some time” to make substantial further progress.

Evans and Daly, who are on the dovish wing of the Fed’s policy makers, echoed the Fed chair by stressing it would be a while before the time was ripe to talk about tapering.

“When you get a jobs report like you did, and you see the volatility that we’ve had, you say, OK, we’re on a good path, but we’re a long way from home,” Daly said. “And when you’re a long way from home, it’s not yet time to start thinking about talking about relaxing the accommodation that we’ve given.”