In a much-needed shot of economic enthusiasm, the Department of Labor reported employment rose by 379,000 in February. This was a welcome change from January when only 49,000 jobs were added. However, in another piece of good news, hiring was actually more robust in January than initially reported and the data was revised upwards to 166,000 from 49,000.
For President Joe Biden’s first full monthly jobs report, the unemployment rate fell to 6.2 percent. The positive increase in job numbers shows signs that we are in a growth phase. It’s especially positive since February was challenging as the vaccine rollout took some time, and freezing weather adversely impacted businesses in Texas and other states.
The DoL statistics signal a correlation between the states easing-up on restrictions and the enhancement of hiring people. As people started getting their vaccine shots, the mood of the country shifted from fear to relief. This portends good news for the future of the job market.
The U.S. Bureau of Labor Statistics added “most of the job gains occurred in leisure and hospitality,” a sector that was hit hard by the repercussions of the outbreak. There were also “gains in temporary help services, health care and social assistance, retail trade, and manufacturing. Employment declined in state and local government education, construction, and mining.”
Most of the increases in hiring were in the beaten-down leisure and hospitality sector. This area was decimated by the repercussions of the outbreak. There was an increase of 355,000 jobs for workers at bars, hotels, gambling, amusement establishments and restaurants amid a relaxation of restrictions.
Unfortunately, one large segment of the workforce continues to suffer. This group consists of the long-term unemployed — people who have been out of work for 27 weeks or longer. The numbers are large, including roughly 4 million Americans. They represent about two in five of the unemployed in the United States. To make matters worse, there is an underlying bias on the part of corporations against long-term unemployment. They question why didn’t they find a job and have their skills atrophied.
We are still not out of the woods yet. There are many Americans who have given up looking for a job and fell off the official federal government statistics. Federal Reserve Bank officials say that the Labor Department’s numbers are understated as over four million people quit the labor force in the last year. Some of these folks include parents who needed to render child care and couldn’t juggle a job too. Others were sidelined due to health care concerns. They are not included in the official jobless count.
The U.S. has about 10 million fewer jobs today than last year at this time. Millions of workers are still depending upon unemployment benefits and government assistance programs. Last week, first-time jobless claims rose.
Lawmakers in Congress are working towards passing President Biden’s $1.9 trillion financial pandemic relief program. The infusion of monetary stimulus would hopefully help recover the job loss gap.
Oxford Economics forecasts that “growth will reach 7% for all of 2021,” an incredibly fast expansion. The U.S. Congressional Budget Office believes America will see 6.2 million new jobs in 2021, making up some of the covid-related job losses.
Other positive-looking metrics include an increase in consumer spending when people received their stimulus relief checks which bolstered retail store sales. Manufacturing picked up and home sales have been blazing hot driven by low-interest rates.
There is emerging optimism. It’s being predicted that a combination of loosening up restrictions, getting a sizable majority of the population vaccinated, Biden’s stimulus package, increases in household savings and a resurgence in manufacturing will accelerate hiring. It’s anticipated that once we are past the pandemic, pent-up demand will create an economic boom resulting in new jobs created and workers brought back from furloughs and layoffs.