U.S. unemployment rose to 6% in April, its highest level in more than seven years.

Although the jump was not unexpected, only 43,000 new jobs were created in the month, fewer than expected.

“The U.S. economy may be on the mend, but it’s not out of the woods just yet,” say RBC Financial Group economists in response to the numbers. “The U.S. labour department today delivered a nasty dose of reality on the country’s employment situation. But perhaps even more significant was the revision in the March figures, which saw an initial employment gain of 58,000 slashed to a decline of 21,000.”

April’s labour report marks the second straight month that the previous month’s positive gains were revised from positive to negative, notes RBC. “Despite the sobering tone of the today’s labour numbers, some good news did emerge from the factory sector. Manufacturing overtime hours, an important precursor for healthy economic growth, advanced for the second consecutive month while manufacturing payrolls shrank by just 19,000, down from 38,000 and 54,000 in March and February respectively.”

BMO Nesbitt Burns notes that initial market reaction to the very weak April U.S. jobs report was ‘a muffled yawn’. “Nonetheless, the great U.S. job machine that normally grinds out 250,000 net new jobs per month is sputtering badly. Highly paid goods-producing jobs are declining. Lower-paid service jobs, primarily in temporary help agencies, are rising slowly. There is not enough income being generated by this tepid performance to fuel decent growth of consumer spending. We believe that overall U.S. growth will, accordingly, move to a visibly slower pace on the demand side of the economy relatively soon.”

CIBC World Markets says that it had expected a peak unemployment rate of 5.9%, so it’s already one tenth above that target. “The Fed has never started a post-recession tightening cycle prior to a downtrend in the unemployment rate. We are therefore sticking to our call for the first rate hike to be pushed back until August. We will have to see a pickup in hiring over the balance of the quarter to generate the income gains needed for our second-half consumer spending outlook, which has households holding to a roughly 3% real consumption pace.”

RBC also notes that, in other news, the Institute for Supply Management released its April survey results for the non-manufacturing sector. In April, the index recorded a value of 55.3, down 2% from March. “While the pace has slowed from the previous month, the above 50 level continues to indicate healthy expansion of the services side of the economy.”

BMO concludes, “The Fed will not and should not consider tightening while unemployment is rising sharply. Rising unemployment and weak wage growth bode well for lower CPI inflation ahead. The U.S. economy will be asked to absorb the graduating college and high school classes in the weeks ahead. It’s not going to happen smoothly.”