WASHINGTON (AP) – The US job market delivered a burst of strength in February. It raised hopes that the introduction of viral vaccines, the distribution of federal aid, and the increasing willingness and ability of consumers to go out and spend will boost the economy as the weather warms.
Employers added 379,000 jobs, the government said Friday, the most since October and far ahead of economists’ forecasts. The unemployment rate, which had fallen to 6.2%, has now 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 a breathtaking job loss.
Shut down for most of last year, the economy has gradually reopened as more people are vaccinated and fewer are infected. According to Johns Hopkins University, the number of confirmed new cases of coronavirus has dropped from nearly 250,000 in early January to an average of below 60,000 per day.
A government bailout package late last year also netted $ 600 checks to most adults, on top of an even bigger economic bailout last spring. President Joe Biden is trying to give households another boost with a $ 1.9 trillion aid package that would bring additional benefits to the unemployed and send $ 1,400 to most families.
“Improving health, expanding vaccine distribution and generous fiscal stimulus will create a powerful cocktail lifting real (economic) growth to 7% by 2021”, reversing last year’s decline from 3.5%, said Gregory Daco and Lydia Boussour of Oxford Economics in a study. Note. They expect the economy to add an average of 580,000 jobs per month this year.
Here are five takeaways from the February jobs report:
RESTAURANTS ARE COMING BACK
No part of the economy has been more damaged by the pandemic recession than the leisure and hospitality sectors. With more bars, restaurants and hotels filling up again, this industry has reclaimed many of its lost jobs.
In February, leisure and hospitality provided 355,000 jobs – more than 90% of the economy’s total profit. The added jobs include 286,000 in restaurants and bars alone.
Many of those jobs are returning as California and Texas – the two most populous states – fully reopen their economies, along with some other states. Yet last year’s job losses in the leisure and hospitality industry were so deep that the sector is still out of 3.5 million jobs from pre-pandemic levels. Even if February’s scorching pace could be maintained, it would be another ten months for the recreation and hospitality industry to regain its pre-pandemic jobs. And then there are not even the extra jobs that this sector would have created in the past year under normal circumstances.
EARLY SPRING
Job growth in February was about double what economists expected. And the scenery looked better in the rearview mirror too. The government’s revised estimates created a net 38,000 jobs for 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, likely a temporary result of freezing winter weather and power outages in Texas and elsewhere. And the cutting of 86,000 government jobs in February in part reflected the technical difficulties associated with accounting for school closures and reopenings in the face of the pandemic.
A YEAR LOST
A year ago the pandemic had to hit the United States hard. As a result, last month’s data shows how much damage the virus has done to the job market in 12 months. The comparisons to the pre-pandemic days are ugly.
Despite last month’s impressive gains, the economy is still down by about 9.5 million jobs as of February 2020. And the proportion of adults working or looking for work – the so-called employment rate – was 61.4% in February, a sharp drop. from 63.3% a year earlier. This share is now close to the level of the mid-1970s, before a massive influx of women entered the American workforce. In addition, the unemployment rate of 6.2% in February, although significantly down from last spring, is still high compared to 3.5% a year earlier.
RACIAL INEQUALITY
The job growth in February did nothing to reduce the chronic inequalities between white Americans and minorities that reflect broader economic inequalities.
The unemployment rate among black Americans rose 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 decreased by 164,000. And the number 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 rate much lower than for minorities) and for Hispanics (from 8.6% to 8.5%).
GONE FOREVER
Employers continued to call back employees they left after the virus hit last year. But many jobs seem to have disappeared forever, and those who held those positions could be left without work indefinitely.
The number of Americans temporarily fired fell by 517,000 to 2.2 million last month. At the same time, the number of permanently unemployed people remained at 3.5 million, down from just 6,000 on January. Since September, the permanent job losers are now in the minority than the temporarily unemployed every month.