February job growth surges above expectations as coronavirus recovery picks up steam
US has recovered roughly half of 22M jobs lost during the first 2 months of pandemic
Yardeni Research President Ed Yardeni and Evercore ISI Chairman Ed Hyman provide insight into economic growth, today’s markets and the Federal Reserve.
The U.S. economy added 379,000 jobs in February, evidence the labor market's recovery is gaining steam nearly one year into the pandemic as coronavirus caseloads fall nationwide and many states ease restrictions on business activity.
The unemployment rate fell slightly to 6.2% — well below the April peak of 14.7% but about twice the pre-crisis level, the Labor Department said in its monthly payroll report released Friday. Economists surveyed by Refinitiv expected the report to show that unemployment remained unchanged at 6.3% and the economy added 182,000 jobs.
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In total, the U.S. has recovered roughly half of the 22 million jobs lost during the first two months of the pandemic. There are still about 9.5 million more Americans out of work than there one year ago, before the crisis began, the report shows.
But the report — which marks the most jobs created since October — is a sign of renewed momentum in hiring. After a sharp contraction in March and April, the labor market quickly rebounded, adding 9.3 million jobs in the span of just three months. But in the months since then, job growth cooled dramatically, with employment falling by 306,000 in December, revised figures show. January's gains were revised higher, to 166,000 from 49,000.
Economists attributed the better-than-expected report to more people receiving the COVID-19 vaccine, a lower level of infections and fewer restrictions on businesses.
“Today’s jobs report sets an extremely positive tone as we move into warmer months and the pace of COVID-19 vaccinations accelerates,” said Tony Bedikian, head of global markets at Citizens Bank. “While the labor market still has a lot of ground to make up, we are in a different place than we were a year ago and the economy seems poised for a strong rebound.”
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The leisure and hospitality industry, the sector hit hardest by the pandemic, accounted for the bulk of the gains, with payrolls increasing by 355,000 as state governments relaxed restrictions on dining out. Bars and restaurants saw employment rise by 286,000, while hotels jumped by 36,000. The amusement, gambling and recreation businesses added 33,000.
Losses in state and local government, which saw payrolls shrink by 86,000 last month, weighed down some of the gains.
The report comes as congressional Democrats move forward with passing a nearly $2 trillion relief package on a party-line basis. The measure is expected to include a $1,400 stimulus check, increased supplemental unemployment benefits at $400 a week through August, $160 billion for vaccine distribution and $350 billion for state and local governments.
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GOP lawmakers, citing the nation's ballooning deficit, have criticized the size and scope of the stimulus bill, saying the economy is already poised for a strong rebound without another multitrillion-dollar spending boost.