WASHINGTON (AP) – America’s labor market experienced an explosion of strength in February. This has raised hopes that the launch of viral vaccines, the distribution of federal aid and the growing willingness and ability of consumers to go out and spend will reinvigorate the economy as the climate warms up.
Employers created 379,000 jobs, the government said on Friday, the biggest since October and far surpassing economists’ forecasts. The unemployment rate, which fell to 6.2%, has fallen almost every month since it peaked at 14.8% in April last year, after the pandemic broke out in the United States and caused job losses to take the breath.
Closed for much of last year, the economy has gradually reopened as more people are vaccinated and less infected. The number of new confirmed coronavirus cases has dropped to an average of below 60,000 a day, from almost 250,000 in early January, according to Johns Hopkins University.
A government aid package late last year also delivered checks for $ 600 to most adults, adding to an even bigger economic bailout last spring. President Joe Biden is trying to give families another boost with a $ 1.9 trillion aid package that would add benefits for the unemployed and send $ 1,400 to most families.
“Improving health conditions, expanding the distribution of vaccines and generous fiscal stimulus will form a powerful cocktail that raises real (economic) growth to 7% in 2021”, reversing last year’s drop of 3.5%, Gregory Daco and Lydia Boussour, of Oxford Economics, said in a research note. They expect the economy to create an average of about 580,000 jobs a month this year.
Here are five lessons from the February jobs report:
REBOUND RESTAURANTS
No area of the economy has suffered more devastation from the pandemic recession than the leisure and hospitality sector. Now, as more bars, restaurants and hotels reopen to full capacity, this industry has recovered many of its lost jobs.
In February, leisure and hospitality created 355,000 jobs – more than 90% of the economy’s total gain. The added jobs included 286,000 in restaurants and bars alone.
Many of these jobs are coming back as California and Texas – the two most populous states – reopen their economies more completely, along with a few other states. However, job losses in leisure and hospitality were so deep last year that the sector still has 3.5 million jobs below its pre-pandemic level. Even if the torrid pace of February could be maintained, it would take another 10 months for the leisure and hospitality sector to regain its pre-pandemic job level. And that doesn’t even include the additional jobs that this sector would have added in the past year under normal circumstances.
A FIRST SPRING
Employment growth in February was about twice the number that economists had expected. And the landscape looked better in the rearview mirror too. The government’s revised estimates added 38,000 jobs in December and January combined.
Most economists also shrugged off a dose of bad news in Friday’s report: a loss of 61,000 construction jobs that was probably a temporary consequence of the freezing winter and power cuts in Texas and elsewhere. And the cut of 86,000 public jobs in February reflected, in part, technical issues involved in accounting for the closure and reopening of schools in the face of the pandemic.
A LOST YEAR
A year ago, the pandemic had not yet hit the United States hard. As a result, last month’s data illustrates the damage the virus has done to the job market in 12 months. Comparisons with pre-pandemic days are ugly.
Despite the impressive gain from last month, the economy is still down by around 9.5 million jobs compared to February 2020. And the proportion of adults who are working or looking for work – the so-called labor force participation rate labor – was 61.4% in February, a sharp drop of 63.3% a year earlier. That proportion is now close to where it was in the mid-1970s, before a large influx of women entered the American workforce. Furthermore, the 6.2% unemployment rate in February, although it fell significantly from last spring, is still high compared to 3.5% a year earlier.
RACIAL INEQUALITY
Employment growth in February did nothing to reduce the chronic disparities between white Americans and minorities, which reflect broader economic inequalities.
The unemployment rate for black Americans increased last month for the first time since April, from 9.2% in January to 9.9% in February. The number of African Americans who said they were employed fell by 164,000. And the number of people who said they were unemployed increased by 129,000.
In contrast, unemployment fell slightly last month for whites (from 5.7% to 5.6%, a much lower rate than for minorities) and for Hispanics (from 8.6% to 8.5% ).
IO FOR WELL
Employers continued to call back workers they had licensed after the virus spread last year. But many jobs seem to have disappeared forever, and those who held those positions may remain unemployed indefinitely.
The number of Americans on temporary leave plummeted by 517,000 last month, to 2.2 million. At the same time, the ranks of the permanent unemployed remained stagnant at 3.5 million, just 6,000 less than in January. The permanent unemployed now outnumber the unemployed temporarily every month since September.