Good news for your Friday: the economy added a whopping 379,000 jobs in February — far outpacing expectations.
Why it matters: Virus cases eased in recent weeks and states lifted restrictions, helping fuel a hiring surge. It’s proof of how much control the pandemic has over the job market.
The clearest signal: The bounce-back was largely driven by hiring in the leisure and hospitality sectors, which came even in the dead of winter.
- This sector is a key example of one that can’t recover until people feel safe eating and drinking out.
Here’s the bad news: Job growth peaked with 152.5 million payrolls before the pandemic hit the labor market.
- Even with today’s report — the best jobs growth since October — we’re still more than 9 million jobs below that level one year later.
- And despite the big gains in leisure and hospitality, the sector still has 20% fewer jobs.
- The number of workers who have been unemployed for 27 weeks or more — 4.1 million — barely budged.
Between the lines: President Biden was handed a labor market hobbled by a pandemic. Its recovery hinges on keeping COVID cases low, succeeding with mass vaccination, and getting hard-hit businesses to return to hiring.
- “February was OK but at that pace, [it] would take 4 1/2 years to recover. We need more like 1m jobs a month,” Jason Furman, a former economic adviser in the Obama administration, tweeted.
- The jobs figures in January and February also came in the wake of improving case numbers and a $900 billion relief bill passed in December, Furman noted. The Senate is currently debating Biden’s $1.9 trillion rescue package.
The bottom line: Economists are penciling in a “Roaring 20s”-like recovery — with eye-popping growth figures to boot! — as vaccines continue to roll out and the economy opens up.
A pessimistic parting shot, courtesy of the Federal Reserve chair: “We have significant ground to cover,” Jerome Powell said yesterday, cautioning that a complete job market healing likely won’t come this year.