Although the March jobs report shows employment is continuing to rise as more people could be eligible to get a vaccine soon and industries that were hard hit last spring are starting to recover, it still could take some time for some of the harder-hit subsectors to get back to where they were before the pandemic.
“It’s great to see progress there, but I think you look at that list and it’s very clear that the big constraint there is the virus, the pandemic,” Nick Bunker, economic research director at Indeed, told Insider about industries that are still below pre-pandemic levels. “Movie theaters and hotels aren’t going to be able to get back to any semblance of health until we have this pandemic under control.”
He added that for those industries, it really depends on how quickly people can get the coronavirus vaccine and when some of the industries that have had constraints throughout the pandemic, like movie theaters, can safely fully reopen.
The following chart highlights the percent change in employment from February 2020 to March 2021 across industries from the Bureau of Labor Statistics along its vertical axis. We also included median hourly wage data as of May 2020 from the BLS’ National Occupational Employment and Wage Estimates program along the horizontal axis.
As has been the case throughout the pandemic, many low-wage industries have seen bigger hits to employment, while most high-paying subsectors are near or even above their pre-pandemic employment levels:
As seen in the chart, motion picture and sound recording industries are one of the groups that are still far below where it was before the pandemic. With only 2,900 more jobs added last month, that industry was still 40.3% below February 2020 employment in March 2021.
Although leisure and hospitality saw employment increase by 280,000 last month, the industries that make up this sector are still below their pre-pandemic level of employment. Accommodation and food services is still 16.8% below February 2020 employment and arts, entertainment, and recreation is down 28.3%.
Within accommodation and food services, food services and drinking places saw a monthly gain of 175,800, but is 14.7% below February 2020 employment. Accommodation, which includes businesses like hotels, has even further to go before it recovers, with employment 29.5% below its February 2020 employment level of 2.1 million.
Even though several industries are still slowly recovering, others are actually seeing gains. With a total of over 1 million jobs in March, couriers and messengers are 23.3% above February 2020 employment of 882,800.
Bunker said the question is whether these industries that have supported the work from home economy, like couriers and messengers, will continue to do well once people start to return to work, people are vaccinated, and people feel that it’s safe to go on vacations or eat in-person at restaurants.
“So I guess the question is, are we all going to keep enjoying, keep wanting to buy, like, at-home workout equipment, or are we going to want to go back to classes?” Bunker said as an example. “Are we fine with delivery services or are people really excited to get out to restaurants, and how much do we shift away from some of the things we’ve been doing since March of 2020? “
The sectors that added the most jobs in March hint at just how much the economic reopening might revitalize the US labor market.
Businesses added 916,000 nonfarm payrolls last month, according to Bureau of Labor Statistics data published Friday morning. The reading handily beat the median estimate of 660,000 payroll additions from economists surveyed by Bloomberg, and signaled that partial reopening, improved vaccination, and new stimulus fueled a strong uptick in hiring.
Job additions were also more evenly spread in March than in the month prior. While February saw leisure and hospitality businesses drive nearly all of the month’s gains, the sector counted for roughly one-third of the March upswing.
Public-sector hiring served as the second-largest source of job additions with 136,000 new jobs, suggesting state and local governments aren’t facing the same stagnant recoveries they endured after the financial crisis.
Job growth in the construction sector also rebounded after harsh winter storms led payrolls to shrink in February.
The utilities industry saw the smallest gain, while information businesses shed 2,000 payrolls through the month.
Here are the sectors that added the most jobs in March.
After months of either meager gains or unexpected losses, March is poised to be a turning point for the US labor market’s recovery.
The Bureau of Labor Statistics will publish its nonfarm payrolls report for March on Friday at 8:30 a.m. ET, providing the most detailed look at how hiring fared throughout last month. The backdrop is promising. March had warmer weather, and a faster rate of vaccinations led some states to partially reopen for the first time since the winter’s dire surge in cases. Coronavirus case counts started to swing higher at the end of the month but largely stayed at lower levels.
Democrats’ $1.9 trillion stimulus plan was also approved early last month and unleashed a wave of consumer demand and aid for small businesses. Sentiment gauges surged to one-year highs, and Americans strapped in for a return to pre-pandemic norms.
Consensus estimates suggest March had the strongest payroll gains in six months. Economists surveyed by Bloomberg said they expected nonfarm payrolls to climb by 660,000, which would be nearly double the 379,000 gain seen in February. The unemployment rate is forecast to dip to 6% from 6.2%.
Some on Wall Street are even more optimistic. March’s release should kick off a “series of extremely strong jobs reports” with payroll additions averaging 950,000 a month through the second quarter, Bank of America economists led by Michelle Meyer said in a note. Unemployment will likely sink to 4.7% by the summer and sink another 0.2 percentage points by the end of 2021, they said.
“It’s hard to keep up with this economy,” the team added. “We think consumer spending is about to take off given the one-two punch of stimulus and reopening.”
UBS holds a similarly encouraging outlook. Economists led by Seth Carpenter see the sharp acceleration in economic activity driving just as strong a jump in hiring. Payroll growth is forecast to average 1 million throughout the second and third quarters as the economy reopens. With roughly 10 million jobs still lost to the pandemic, such a growth rate would recover more than half the country’s missing payrolls.
The bank also said it expected the unemployment rate to decline to 3.6% by the end of 2023, with the drop slowed by a swiftly rising rate of labor-force participation.
Data previewing the headline report showed job growth breaking out of its middling trend. The US private sector added 517,000 jobs in March, according to ADP’s monthly employment report. Though the reading landed just below the median estimate of 550,000, the increase was the largest seen since September and marked a third straight gain.
Separately, weekly jobless claims trended lower through the month, albeit at a sluggish pace. Claims rose to 719,000 last week, according to Labor Department data published Thursday. While that was an increase from the prior week’s total, claims still dropped 3.5% month over month. And the previous week’s reading was revised to 658,000 from 678,000, marking the lowest reading since the pandemic first slammed the labor market.
The Friday report will also highlight whether the recovery is evening out or if a K-shaped trend is growing worse. Unemployment rates for minorities continued to lag those for white Americans in February, and the bulk of early hires were for high-income workers. Preservation of the trend in March’s data could signal that those hit hardest by the pandemic will be some of the last to recover.
What they do, according to O*NET: Plan, direct, or coordinate activities designed to create or maintain a favorable public image, raise issue awareness, or raise funds for their organization or client.
Although data is for May 2020, the pandemic’s effects on employment are not fully captured in these figures. The Bureau of Labor Statistics wrote in the news release about the latest data that these “estimates do not fully reflect the impact of the COVID-19 pandemic” as previous surveys from periods in 2017, 2018, and 2019 were also used.
The 30 highest-paying occupations all earned an average of six figures annually, all above $130,000. Anesthesiologists, which ranked No. 1, earned more than triple the average annual salary for healthcare practitioners and technical occupations of $85,900 with an average annual salary of $271,440. All 30 of these occupations also make more than the overall average for all occupations in May 2020 of $56,310.
In addition to ranking the average salaries, we also included the estimated number of people employed in each occupation as of May 2020, and a brief description of the occupation from the Labor Department’s O*NET occupational database.
The February jobs report shows the labor market in reopening rehearsal.
The US added 379,000 nonfarm payrolls last month, handily exceeding the median economist estimate of 200,000 additions. The unemployment rate fell to 6.2% from 6.3%, labor force participation held steady, and the number of Americans citing COVID-19 for not seeking employment fell by 500,000.
The drivers behind the gains are also encouraging.
While the drop in unemployment seen in January was largely tied to more Americans dropping out of the labor force, last month’s dip was tied to increased hiring across a broad set of sectors. The payroll increase would’ve “easily” topped 500,000 had adverse weather not contributed to construction jobs falling by 61,000, Morgan Stanley economists led by Robert Rosener said.
For all intents and purposes, the report came in more positive than expected. Investors overwhelmingly thought so, too. Treasurys declined sharply as traders bet on a faster-than-expected economic rebound, bringing the 10-year yield to its highest level since February 2020. The Dow Jones industrial average and S&P 500 gained, led by cyclical and value stocks.
Fanning February’s flames
A deeper dive into the data shows a recovery that’s found its footing. The leisure and hospitality industries – among those hit hardest by the pandemic and resulting restrictions – counted for 355,000 of the month’s payroll additions. Temporary job losses declined, suggesting businesses were able to reopen and rehire workers as COVID-19 case counts fell nationwide.
The overall gains are a “surprise” and can be boiled down to reopening “arriving earlier than expected,” Brian Coulton, chief economist at Fitch, said.
Warming weather, continued vaccination, and even lower daily case counts stand to supercharge job gains into the summer. Plenty on Wall Street agree. The data “suggest that the labor market recovery is accelerating in earnest,” Bank of America economists Joseph Song and Michelle Meyer said Friday.
Michael Feroli, chief US economist at JPMorgan, said investors can expect “even better numbers” as reopening provides an “incredibly powerful tailwind.”
“There is no ambiguity regarding where employment is headed, in our view, but just how long it takes to get there,” Rick Rieder, chief investment officer of global fixed income at BlackRock, said.
Not so fast
Still, the battle is far from won. A handful of datapoints signal the climb to maximum employment will be much steeper than the 6.2% U-3 rate implies.
That “real” rate improved to 9.1% through February, according to Insider analysis. While this is down significantly from the year-ago peak of nearly 24%, the pace of decline slowed significantly through the winter.
The U-6 unemployment rate – which tracks people marginally attached to the workforce and Americans employed part-time for economic reasons – showed no improvement at all and held at 11.1% last month.
These gloomier datapoints practically guarantee Powell will keep ultra-easy monetary conditions in place for the foreseeable future. The Fed chief cautioned on Thursday that it “will take some time” to achieve the central bank’s goal of maximum employment. The healthy decline in baseline unemployment is cause for some optimism, but a broad set of criteria need to be met to ensure the recovery is robust, he added.
“We want to see wages moving up. We’d want to see that the gains in employment are broad-based and that different demographic groups were experiencing it,” Powell said. “We have a high standard for identifying what maximum employment is.”
The still-elevated unemployment rate has also been cited by Democrats as a sign additional stimulus is still warranted. Senate Democrats kickstarted a lengthy amendment process on Friday with aims to pass a $1.9 trillion relief package over the weekend. The deal includes $1,400 direct payments, a $400 supplement to federal unemployment benefits, and funding for state and local governments.
While Republicans have argued the bill is a case of overspending, Democrats have pointed to lasting labor-market pain as justification for the hefty price tag. The bulk of February’s payroll gains can be traced to business reopenings, but an additional stimulus package could boost demand and drive new demand for workers.
Those populations are left out of the government’s benchmark U-3 unemployment reading – the number that stood at 6.2% after February. By Insider’s calculations, the “real” unemployment rate touted by Powell and Yellen stands at roughly 9.1% for the same period.
Other gauges used by BLS paint a similarly bleak picture. The U-6 rate – which includes Americans marginally attached to the labor force and those employed part-time for economic reasons – held at 11.1% in February, according to the Friday release. The gauge peaked at 22.9% in April 2020 but still has plenty of room to fall before reaching the pre-pandemic reading of 7%.
To be sure, the jobs report wasn’t all bad. By some measures, it was a sign of major improvement. Nonfarm payrolls grew by 379,000, handily exceeding the median economist estimate of 200,000 payrolls. The hospitality and leisure industries accounted for 355,000 of those new jobs, a signal that the sectors hit hardest by the virus and related lockdowns are steadily improving.
The diffusion index – which tracks how many sectors added jobs versus those cutting payrolls – returned to positive territory, signaling job gains are broadening. The labor-force participation rate held steady at 61.4% after declining the month prior.
The data underscores recent commentary from Fed Chair Powell on his economic outlook. There remains “a lot of ground to cover” before the US comes close to reaching the Fed’s maximum-employment goal, the central bank chief said. And while the unemployment rate remains a key indicator, other gauges are critical for judging the overall health of the labor market, he added.
“Yes, 4% would be a nice unemployment rate, but it would take more than that to get to maximum employment,” Powell said.
The US labor-market recovery accelerated in February as daily COVID-19 cases swiftly declined and the pace of vaccinations improved.
Businesses added 379,000 payrolls last month, the Bureau of Labor Statistics announced Friday. Economists surveyed by Bloomberg expected a gain of 200,000 payrolls.
The increase follows a revised 166,000-payroll jump in January. The labor market has now grown for two straight months after contracting in December as virus cases surged.
The US unemployment rate fell to 6.2% from 6.3%, according to the government report. Economists expected the rate to stay steady at 6.3%. The U-6 unemployment rate – which includes workers marginally attached to the labor force and those employed part-time for economic reasons – remained at 11.1%.
The labor-force participation was also unchanged at 61.4%. A falling participation rate can drag the benchmark U-3 unemployment rate lower, but such declines signal deep scarring in the labor market.
The bigger picture
Jobless-claims data and private-payrolls reports offer some detail as to how the labor market fared through February, but the BLS release paints the clearest picture yet as to how the coronavirus pandemic has affected workers and the unemployed.
Roughly 13.3 million Americans cited the pandemic as the main reason their employer stopped operations. That’s down from 14.8 million people in January.
The number of people saying COVID-19 was the primary reason they didn’t seek employment dropped to 4.2 million from 4.7 million.
About 22.7% of Americans said they telecommuted because of the health crisis. That compares with 23.2% in January.
Roughly 2.2 million Americans said their job loss was temporary, down from 2.7 million the month prior. The number of temporary layoffs peaked at 18 million in April, and while the sum has declined significantly, it still sits well above levels seen before the pandemic.
Filling the hole
The Friday reading affirms that while the economy is far from fully recovered, the pace of improvement is picking up, most likely tied to the steady decline in daily new COVID-19 cases. The US reported 54,349 new cases on the last day of February, down from the January peak of 295,121 cases. Hospitalizations and daily virus deaths have similarly tumbled from their early-2021 highs, according to The COVID Tracking Project.
All the while, the country has ramped up the distribution and administration of coronavirus vaccines. The US has administered more than 82.6 million doses, according to Bloomberg data. The average daily pace of vaccinations climbed above 2 million on Wednesday and has held the level. At the current rate, inoculating three-quarters of the US population would take roughly six months, but the Biden administration has a rosier outlook.
The president on Tuesday announced the US would have enough vaccine doses for every adult by the end of May. While distributing the shots will most likely last beyond May, the new timeline marks a two-month improvement to the administration’s previous forecast.
Still, other data tracking the labor market points to a sluggish rebound. Initial jobless claims totaled 745,000 last week, according to Labor Department data published Thursday. That was below the median economist estimate of 750,000 claims but a slight increase from the previous week’s revised sum of 736,000. Weekly claims counts have hovered in the same territory since the fall as lingering economic restrictions hinder stronger job growth.
Continuing claims, which track Americans receiving unemployment benefits, fell to 4.3 million for the week that ended February 20. The reading landed in line with economist projections.
Other corners of the economy are faring much better amid the warmer weather and falling case counts. Retail sales grew 5.3% in January, trouncing the 1% growth estimate from surveyed economists. The strong increase suggests the stimulus passed at the end of 2020 efficiently lifted consumer spending in a matter of weeks.
All signs point to another fiscal boost being approved over the next few days. Senate Democrats voted to advance their $1.9 trillion stimulus plan on Thursday, kicking off a period of debate before a final floor vote. President Joe Biden has said he wants to sign the bill before expanded unemployment benefits lapse March 14. The new package includes $1,400 direct payments, a $400 supplement to federal unemployment insurance, and aid for state and local governments.
The bill isn’t yet a done deal. Sen. Ron Johnson of Wisconsin forced a reading of the entire 628-page bill on Thursday, as Republicans seek to at least drag out its passage into law. Not a single Republican senator voted to advance the bill Thursday.
A process known as “vote-a-rama” will start after the 20 hours of debate and give Republicans the chance to further impede a final vote by introducing potentially hundreds of amendments to the bill.
The coronavirus sparked the worst unemployment crisis in nearly a century, but the damage differs significantly state by state, according to new data from the Bureau of Labor Statistics.
The nationwide unemployment rate averaged 8.1% throughout 2020 as the pandemic fueled a massive leap in unemployment before giving way to a now-meandering recovery. Yet that overall figure fails to capture massive disparities at the state level.
For one, four states saw average annual unemployment rate above 10% last year. Nevada faced the bleakest downturn, with unemployment averaging 12.8% in 2020. Hawaii and California followed with averages of 11.6% and 10.1%, respectively.
New York – the epicenter of the nation’s first COVID-19 outbreak – saw unemployment average 10% in 2020, according to the Wednesday report.
Conversely, some states’ labor markets saw negligible upticks in unemployment. Nebraska fared the best, with its own rate of 4.2% nearly halving the nationwide figure. Close behind were South Dakota and Utah with average rates of 4.6% and 4.7%, respectively.
Gaps also emerged in states’ employment-population ratios. The metric is a popular alternative measure of unemployment since it counts Americans who dropped out of the labor force.
The ratios fell to record-lows in 15 states, supporting fears that the economic fallout is among the worst ever seen in the US. Nevada, Hawaii, and Rhode Island suffered the biggest declines of the group. The national ratio fell to 56.8% from 60.8% last year.
Mississippi and West Virginia posted the lowest ratios of 50.6% and 50.3%, respectively. To be sure, the readings weren’t the lowest in history for either state. Nebraska ended the year with the highest employment-population ratio of 66.7%.
Overall, 23 states boasted ratios higher than the national figure. Yet all 50 states and the District of Columbia saw their employment-population ratios decline from levels seen in 2019.
The US posted a surprise decline in payrolls in December and all of the 140,000 jobs lost were held by women, according to data.
Analysts had expected an uptick in employment in December but instead American businesses shed 140,000 nonfarm payroll. The country’s unemployment rate stayed steady at 6.7%, according to data released Friday by the Bureau of Labor Statistics.
“The most recent Bureau of Labor Statistics (BLS) monthly jobs report shows that the economy lost 140,000 net jobs in December, marking the first month of job loss since the economy started adding back jobs in May 2020,” said the National Women’s Law Center, a nonprofit focused on achieving gender justice in courts and public policy. “All of the jobs lost were women’s jobs, with women losing 156,000 jobs and men gaining 16,000.”
December’s numbers reflect a slowdown in US economic recovery, which has been mostly stagnant as the coronavirus continues to spread. Small businesses nationwide were forced to shutter to curb its spread.
Job losses have been particularly steep across woman-dominated sectors like education. Women have also lost jobs in the hospitality and retail sectors.
All together, there were 2.1 million fewer women working last month than there were in February, right before the pandemic had seriously hit small businesses and brought intense economic fluctuation, according to the NWLC analysis.
The disparities grow even wider when considering race.
About 1 in 12 Black women and 1 in 11 Latina women remain unemployed, the NWLC analysis says. Those figures represent about 8.4% and 9.1% unemployment rates.
About 5.8% of white men, in comparison, reported unemployment in December.
To offset some of the economic devastation, President Donald Trump signed the second coronavirus relief bill in December. It was a $900 billion relief package that contained $600 direct payments for most Americans.