03.04.22
By: Abha Bhattarai and Andrew Van Dam
Source:
The Washington Post
U.S. adds 678,000 jobs in February, with labor market nearing full recovery from pandemic
The unemployment rate has fallen to a pandemic low of 3.8 percent, the Labor Department said Friday
The U.S. economy created a blockbuster 678,000 jobs in February, adding momentum to a robust recovery that is rapidly returning the labor market to its pre-pandemic boom.
As the omicron variant of the novel coronavirus receded, the unemployment rate fell to a new pandemic low of 3.8 percent last month, from 4 percent in January, the Labor Department said Friday. Average hourly wages for private-sector workers, meanwhile, held steady, climbing by a mere one cent. Annual wages have risen 5.1 percent, although they have not kept up with inflation.
The rosy picture caps off 10 straight months of strong growth, with the economy picking up a record 7 million jobs over the past year and setting the stage for a full recovery by this summer, a little more than two years after the pandemic plunged the country into recession.
“Covid is loosening its grip. The virus ruled through fear, and that fear is fading,” said Austan Goolsbee, an economics professor at the University of Chicago and a former Obama White House adviser. “You see that around the country, as people are willing to go back out to jobs they weren’t willing to take in the midst of the pandemic.”
Job gains continued to be most pronounced in the service industries, such as hospitality, health care and construction, which have scrambled to hire enough workers to keep up with booming demand.
“We saw broad-based gains in every sector — in trucking, warehousing, construction, leisure and hospitality, even in nursing homes,” Labor Secretary Marty Walsh said in an interview. “Ninety percent of the jobs lost in March and April of 2020 have been recovered.”
Friday’s jobs report was based on surveys conducted in mid-February, before Russia’s invasion of Ukraine, and does not reflect the impact of the geopolitical crisis on the U.S. labor market. And although economists say it is unclear exactly how the war might affect American jobs, they note that skyrocketing energy prices, slowdowns in consumer spending or looming uncertainty could prompt businesses to pause hiring in the coming weeks.
For now, workers have been pouring back into the labor market. The unemployment rate, which counts only those who actively looked for work in the past month, is at its lowest level in two years. A broader measure of unemployment, which includes those who want jobs but are not actively seeking them, dropped to 4.7 percent in February, nearing its precrisis rate of 4.3 percent.
“People are coming back to work,” said Nick Bunker, an economist at the jobs site Indeed. “We’ve been seeing this trend since last fall, but it’s become very stark recently, particularly among people of prime working age, between 25 and 54.”
But the gains were not evenly distributed. The unemployment rate for Black women rose to 6.4 percent in February, as tens of thousands left the workforce. Overall, fewer women worked or were looking for work in February than in January, while the labor force participation rate for men rose to its highest level during the pandemic. Also, the unemployment rates for Black and Hispanic workers — 6.6 percent and 4.4 percent, respectively — remained markedly higher than for other groups.
“This is a very strong jobs report, but it’s a mixed picture,” said Nela Richardson, chief economist at ADP. “We’re still not at mission completion.”
The economy is still 2.1 million jobs short of pre-pandemic levels, though economists say that gap is likely to close by this summer if hiring keeps pace with recent gains.
Yet, the tight labor market — in which job openings continue to outnumber job seekers — has forced businesses to change their recruiting and hiring strategies. Employers of all kinds are fast-tracking their hiring processes and in some cases are promising on-the-spot offers to lock in candidates, particularly in retail and hospitality. The Home Depot, for example, which plans to hire 100,000 employees by spring, is touting an “accelerated hiring process” that could land candidates an offer within 24 hours of their applying.
In Mesa, Ariz., Inwook Kim got a job less than two weeks after applying for a position as a graphic designer at an IT consulting firm. He was pleasantly surprised, he said, by how smooth the process was — and how much more money he’s making than at his last job.
“They wanted to hire someone very quickly,” the 30-year-old said. “I had two interviews, and that was it.”
But some economists say the tide may be turning. February’s dramatic pickup in hiring, combined with stalling wage growth, could signal a shift in the labor market.
“One of the consequences of people returning to the labor force is that employers will be less desperate to find the workers they want,” said Elise Gould, an economist at the Economic Policy Institute, a left-leaning think tank. “There could be a cost to wage growth in the near future.”
For now, the strong jobs report increases pressure on the Federal Reserve to raise interest rates when it meets later this month and contributes to concerns that tight labor markets could be fueling inflation, which is already at a 40-year high. Fed Chair Jerome H. Powell told lawmakers on Capitol Hill this week that the central bank is planning to raise interest rates even though any fallout from the Russia-Ukraine war on the U.S. economy remains “highly uncertain.
“It is appropriate for us to move ahead,” Powell said Wednesday. “Inflation is high, too high.”
The pandemic dealt a sudden blow to the labor market, causing the unemployment rate to soar to double digits in early 2020 as employers of all sizes laid off and furloughed workers. But in the months since, companies have rapidly hired back workers. In another positive sign, the number of Americans filing jobless claims — 215,000 as of last week — fell to its lowest level since Jan. 1, the Labor Department said Thursday.
“We saw record job gains in 2021, setting us up for a 2022 where the fundamentals of the labor market are still very strong,” said Daniel Zhao, a senior economist at the jobs site Glassdoor.
Service jobs were among the hardest hit at the beginning of the pandemic, when temporary closures and stay-at-home orders forced companies to lay off or furlough millions of workers. Many of those sectors are now seeing meaningful rebounds as people return to the labor force. Nursing homes, for example, have lost more than 200,000 jobs since the pandemic began. But last month, they added 1,600, a rare glimmer of good news for the industry.
Linda Austin, who co-owns a nursing home in Lafayette, Tenn., has struggled to find employees throughout the pandemic. Last month she breathed a sigh of relief when she finally managed to fill two openings, for a housekeeper and a nursing assistant. But one of those new hires has already quit, leaving her with more than a dozen empty positions at Knollwood Manor.
“We used to have no problem getting people to come work here, but now we get zero applicants,” she said. “People are just not interested. We need a miracle and a magic wand.”
“We saw record job gains in 2021, setting us up for a 2022 where the fundamentals of the labor market are still very strong,” said Daniel Zhao, a senior economist at the jobs site Glassdoor.
Service jobs were among the hardest hit at the beginning of the pandemic, when temporary closures and stay-at-home orders forced companies to lay off or furlough millions of workers. Many of those sectors are now seeing meaningful rebounds as people return to the labor force. Nursing homes, for example, have lost more than 200,000 jobs since the pandemic began. But last month, they added 1,600, a rare glimmer of good news for the industry.
Linda Austin, who co-owns a nursing home in Lafayette, Tenn., has struggled to find employees throughout the pandemic. Last month she breathed a sigh of relief when she finally managed to fill two openings, for a housekeeper and a nursing assistant. But one of those new hires has already quit, leaving her with more than a dozen empty positions at Knollwood Manor.
“We used to have no problem getting people to come work here, but now we get zero applicants,” she said. “People are just not interested. We need a miracle and a magic wand.”
Sabrina Zanolini recently landed a software engineering position in Philadelphia after two months of searching. She applied to about 50 jobs and interviewed for six before getting an offer from the defense giant Lockheed Martin.
“It took awhile to find entry-level openings, but once I did, it happened very quickly,” said Zanolini, 22, who graduated from Penn State in December. “Almost all of my friends — nine out of 10 of them — were able to get full-time employment pretty much immediately after school.”
But some economists said the upbeat report doesn’t mean the economic recovery is a done deal, particularly as Russia’s war on Ukraine creates new uncertainties for global markets, as well as food and energy prices.
“This was, no question, a good jobs report, but it’s definitely not sustainable,” said Joe LaVorgna, chief Americas economist at Natixis and a former Trump White House economic adviser. “Eventually it’s going to slow — and that may be sooner than we think because of what’s happening overseas. The chances of recession risk are rising.”
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