The numbers: The US 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 hires in the coming months, as most people are vaccinated and the economy reopens completely.
The increase in hires last month was concentrated in businesses such as restaurants, retailers, hotels and entertainment venues as states relaxed restrictions on customer caps and public gatherings. Most other industries also added workers.
Recruitment was also much stronger in January than initially reported.
The US economy provided the most new jobs in four months in February. Shown above is a hiring sign at a Target store in California.
Justin Sullivan / Getty Images
See: A visual look at how an unfair pandemic has changed work and life
The official unemployment rate fell from 6.3% to 6.2%, although economists generally believe the real figure is much higher.
Federal Reserve officials peg the unemployment rate closer to 10% after correcting the data for disruptions caused by the pandemic.
The recovery in job creation in February is likely to mark the start of an important new recruitment cycle. Warmer weather, declining coronavirus cases, soaring vaccinations and another massive boost in federal stimulus packages are likely to serve as jet fuel for the economy in the spring and summer, Wall Street professionals and Fed officials say.
Read: Inflation concerns are back. Should you be concerned?
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. Shares rose during premarket trading.
Read: Unemployment claims rise slightly to 745,000 after power outages in Texas
What happened: New leisure and hospitality jobs – restaurants, hotels, casinos, theaters, and the like – increased by 355,000 last month to represent most of the workforce in February.
These companies had lost more than 500,000 jobs in December and January after coronavirus cases peaked and the weather turned cold.
Hiring is likely to pick up even more in the coming months as the weather warms and Americans gain confidence when traveling, eating out, going to a game, or visiting a museum or amusement park.
Professional companies also added 63,000 employees – though most were temporary – while healthcare providers and retailers both filled more than 40,000 jobs. Manufacturers came in with 21,000 new employees
Read: Manufacturers are growing fastest since the pandemic
Construction employment fell by a surprising 61,000, although companies are desperate to recruit. Bad weather last month was the main culprit.
Home sales soared during the pandemic, but builders face a shortage of skilled workers that is unlikely to decrease even if the pandemic does.
State and local governments also cut 86,000 jobs last month, mostly in education, but the decline likely reflects seasonal disruptions linked to the pandemic. Private sector hires rose even more in February by 465,000 when the government is excluded.
Nearly 50,000 people now rejoined the labor force in February, but that still means that about 4.2 million people went missing during the pandemic. Those people are no longer counted in the official unemployment rate, making it artificially low.
The number of jobs created in January was sharply revised from 49,000 to 166,000. However, the fall in employment in December increased from 227,000 to 306,000.
The big picture: The economy is poised to grow by leaps and bounds again after a harsh winter – if the coronavirus vaccines prove highly effective.
An effective vaccine allows states to lift all restrictions, return Americans to live their lives without fear of their safety, and give companies the incentive to hire people. New financial support from the government will only add to the burgeoning momentum.
What do they say? “As vaccine distribution continues to accelerate and the economy is in the early stages of a reopening, substantial gains should be made in the coming months,” said Curt Long, chief economist of the National Association of Federally Insured Credit Unions.
“The engine of the economic recovery is rebooting as the winter wave of the pandemic eases, although there is still a long way to go,” said Glassdoor senior economist Daniel Zhao. “The economy should add nearly 1 million jobs per month for the rest of 2021 to return to pre-crisis levels by the end of the year.”
Market reaction: The Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
were expected to open higher in Friday trades.