The U.S. economy recorded the biggest gain in jobs since last summer in March, giving hope for strong growth this year as more Americans get vaccinated and states lift restrictions.
(CN) — American employers added a whopping 916,000 jobs last month, the most since last August, while the unemployment rate fell to 6%.
The Labor Department report released Friday signals a strengthening recovery as the public health outlook improves and stimulus checks hit bank accounts.
“This is exactly what we need to see,” said Nick Bunker, economic research director at Indeed Hiring Lab.
Bunker noted the economy is still down about 10 million jobs compared to prerecession levels, but said at this rate the jobs market could be back to where it was before the coronavirus pandemic by summer 2022.
“There was a huge pickup in the pace of job gains, with bounceback in some of the most strongly affected sectors,” he wrote. “Leisure and hospitality lead the way, contributing almost a third of the total job gains. It is also great to see the public sector adding jobs since during the last recovery, they slowed job growth.”
The leisure and hospitality sector, which includes restaurants, hotels and bars hit hardest by the Covid-19 crisis, added 280,000 jobs in March. The construction industry added 110,000 while education and health services gained 101,000.
Job growth was also seen in professional and business services (66,000), manufacturing (53,000), transportation and warehousing (47,500) and retail (22,500).
The public sector added 136,000 jobs last month, including 83,000 in local government, 46,000 in state government and 7,000 at the federal level.
“This report is good news. Hopefully we will get even better news in the months ahead,” Bunker said.
Friday’s report also revised job gains upward for the first two months of the year. The Labor Department said there were actually 233,000 jobs added in January, up 67,000 from the last estimate of 166,000. February’s job gains were revised up by 89,000, from 379,000 to 468,000.
Joel Naroff of Naroff Economics predicted this is just the beginning of robust labor market growth.
“The economy was in good shape before the pandemic hit and the government had to shut things down. But instead of watching as the economy burned, the government stepped in to keep businesses going and support households with massive amounts of stimulus,” Naroff wrote.
He added, “The result is once the pandemic started to ease and the economy started opening up again, firms that would have gone bankrupt were still ‘operating’ and ready to hire back workers that had been moved from the private sector payrolls to the government assistance programs.”
Naroff noted the latest stimulus bill extends certain types of assistance through September and the massive vaccination rollout is allowing more businesses to fully reopen, meaning the U.S. will likely keep seeing big job gains in the coming months.
“The question we are facing going forward is not will the employment numbers be strong, but how many of the lost positions will ultimately return,” he said.
The unemployment rate fell from 6.2% to 6% last month, according to the Labor Department report.
President Joe Biden’s American Rescue Plan, passed in early March, extended emergency unemployment benefits and included $1,400 direct payments to many Americans.
The $1.9 trillion package also included billions to tackle the pandemic, mostly focused on vaccines and testing. State and local governments and schools were also given extra funding though the bill.
Elise Gould, a senior economist at the Economic Policy Institute, said the benefits of the stimulus package will continue to be seen in the next few months.
“Even at this pace, it could take more than a year to dig out of the total jobs shortfall. However, today’s number is certainly a promising sign for the recovery, especially as vaccinations increase and vital provisions in the American Rescue Plan have continued to ramp up since the March reference period to today’s data,” she wrote.