The numbers: The United States created 379,000 new jobs in February – the biggest gain in four months – in what is likely to be a preview of an increase in hiring in the coming months, as most people are vaccinated and the economy reopens fully.
The increase in hiring last month focused on businesses such as restaurants, retailers, hotels and entertainment venues, as states eased restrictions on customer limits and public meetings. Most other industries also added workers.
Hiring was also much stronger in January than initially reported.
The US economy generated the most new jobs in February in four months. Above, a sign of hiring is displayed at a Target store in California.
Justin Sullivan / Getty Images
To see: A visual view of how an unfair pandemic reshaped work and home
The official unemployment rate, in turn, fell from 6.3% to 6.2%, although economists widely believe that the real rate is much higher.
Federal Reserve officials estimate the unemployment rate to be around 10% after adjusting the data for distortions caused by the pandemic.
The resumption of job creation in February is probably the beginning of a new important hiring cycle. The warmer climate, the drop in coronavirus cases, the increase in vaccinations and another big increase in federal stimulus should act as fuel for the economy in the spring and summer, say Wall Street professionals and Fed officials.
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The increase in new jobs easily exceeded Wall Street expectations. Economists polled by Dow Jones and The Wall Street Journal predicted 210,000 new jobs. The shares rose in the pre-market negotiations.
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What happened: New leisure and hospitality jobs – restaurants, hotels, casinos, theaters and the like – increased by 355,000 last month, accounting for most of the hiring in February.
These companies lost more than 500,000 jobs in December and January after coronavirus cases reached a crescendo and time has cooled.
Hiring is expected to return even stronger in the coming months, as the weather warms up and Americans become more confident about traveling, dining out, going to a game or visiting a museum or amusement park.
Professional firms also added 63,000 employees – although most were temporary – while healthcare providers and retailers filled more than 40,000 jobs. Manufacturers contributed 21,000 new hires
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Construction employment has dropped by an astonishing 61,000, although companies are desperately looking to hire. Bad weather last month was the main culprit.
Home sales skyrocketed during the pandemic, but builders are facing a shortage of skilled workers that is unlikely to diminish, even if the pandemic has subsided.
State and local governments also cut 86,000 jobs last month, mainly in education, but the drop likely reflects seasonal distortions linked to the pandemic. Private sector hiring rose even further by 465,000 in February, when the government was excluded.
In the meantime, a small number of 50,000 people returned to the workforce in February, but that still means that some 4.2 million people disappeared during the pandemic. These people are no longer counted in the official unemployment rate, making it artificially low.
The number of jobs created in January has been revised upwards from 49,000 to 166,000. The fall in employment in December was raised to 306,000 from 227,000, however.
The big picture: The economy is poised to start growing by leaps and bounds again after a harsh winter – if vaccines against coronavirus prove to be very effective.
An effective vaccine will allow states to remove all restrictions, allow Americans to live again without fear for their safety, and give companies the incentive to hire. A new stimulus from the government will only increase the initial momentum.
What are they saying? “With vaccine distribution continuing to accelerate and the economy in the early stages of a reopening, the next few months are expected to record robust gains,” said chief economist Curt Long, of the National Association of Federally Insured Credit Unions.
“The engine of economic recovery is restarting as the winter wave of the pandemic recedes, although there is still a long way to go,” said senior economist Daniel Zhao of Glassdoor. “The economy would need to add almost 1 million jobs per month until the rest of 2021 to return to pre-crisis levels by the end of the year.”
Market reaction: The DJIA of the Dow Jones Industrial Average,
and S&P 500 SPX,
were set to open higher in Friday’s trading.