Even with the blowout March jobs report, many industries have a long way to go to fully recover

outdoor dining
A server brings food to a table in the outside dining area for Kimmie’s Coffee Cup in Orange, California, on Tuesday, March 9, 2021.

  • The March jobs report showed big monthly gains in some industries, including leisure and hospitality.
  • However, some industries are still far below pre-pandemic employment.
  • This includes accommodation and motion picture and sound recording.
  • See more stories on Insider’s business page.

Despite the postive jobs report from the Bureau of Labor Statistics on Friday, some industries are still far below their level of employment before the pandemic.

Nonfarm payroll employment grew by 916,000 in March, and leisure and hospitality made up about a third of those gains. If employment gains continue at this rate, it could take until January 2022 to get back to the pre-pandemic employment level.

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? “

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Here’s when jobs could get back to their prepandemic level if March’s blowout growth rate continues

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  • The March jobs report blew away expectations, adding 916,000 nonfarm payrolls against estimates of 660,000.
  • But the US still has about 8.4 million fewer jobs than it did in February 2020.
  • At the current rate, employment would recover to that level by January 2022.
  • See more stories on Insider’s business page.

Today’s March jobs report was some of the best economic news the US has seen in recent months, with a net gain of 916,000 jobs, well exceeding economists’ expectations.

But the ongoing COVID-19 pandemic has blasted such a large hole in the US economy that even at that stunning pace, it could still take several months for the jobs market to recover.

In March and April 2020, the US economy lost a total of about 22.1 million jobs amid the first major wave of the coronavirus’ spread and the subsequent lockdowns in response. Through the rest of 2020, most months saw steady job gains, and by March 2021, there were about 8.4 million fewer nonfarm payroll jobs than February 2020’s prepandemic peak of 152.5 million.

If the economy continues adding jobs at the March rate of 916,000 per month, there will be about 152.4 million in December, just shy of the prepandemic peak. By January 2022, employment would be above that level, with about 153.3 million jobs:

Of course, before the pandemic struck, the US economy was booming, adding around 170,000 jobs a month in 2019. Indeed economist Nick Bunker noted that catching up with that trend would take a little longer, with employment reaching the number of jobs the economy would have had under prepandemic growth rates next summer:

Whether or not the US economy can keep adding jobs at this pace remains to be seen. The ongoing vaccination campaign should make it safer for more businesses to reopen fully over the next several months, and the Biden administration’s recently passed American Rescue Plan stimulus package and proposed infrastructure bills could provide an extra boost.

Read the original article on Business Insider