(CN) — The U.S. economy added back 379,000 jobs last month, a big improvement over January's numbers that could signal a shorter road to recovery from the Covid-19 pandemic.
Friday’s report from the Labor Department shows the unemployment rate ticked down from 6.3% to 6.2%. It is the first full monthly employment report under President Joe Biden.
January’s gain was revised up from 49,000 new jobs to 166,000. February’s total shattered economist expectations of about 200,000 jobs added. However, the economy is still down 9.5 million jobs compared to pre-pandemic levels in February 2020.
Most of last month’s growth came in the leisure and hospitality industry, which has been among the hardest hit from the coronavirus crisis. That sector added back 355,000 jobs, while retail trade recovered 41,000 jobs.
Nick Bunker, economic research director at Indeed Hiring Lab, said the job market growth in February “was a pleasant surprise, but it is still too early to get excited.”
“At this pace, it will take about four and a half years to get back to where the labor market would have been without the pandemic,” he wrote. “Millions of Americans out of work do not have that time.”
He pointed to growth in restaurants and bars as the main bright spot in Fridays’ report.
“This industry has been especially impacted by the virus, so progress here is a good sign for the future,” Bunker said. “But while progress is being made, there’s still so much ground to be covered. The labor market is moving forward, it just needs to speed up.”
Other industries that recovered jobs last month include temporary help services (53,000), health care and social assistance (46,000) and manufacturing (21,000).
Those gains were offset by losses in local government education and state government education, which lost 37,000 and 32,000 positions, respectively. Construction jobs also fell by 61,000 in February while there were 8,000 fewer jobs in mining.
The jobs report comes as the U.S. is seeing a decline in new daily Covid-19 infections and deaths. About 2 million vaccines are being administered each day. Last weekend, the Food and Drug Administration approved Johnson & Johnson’s one-dose vaccine that can be easily transported, which will speed up the national effort to inoculate Americans.
The Senate is also expected to vote on President Biden’s $1.9 trillion coronavirus relief bill this weekend. It includes direct payments of $1,400 to many Americans and enhanced unemployment benefits of $400 per week.
Elise Gould, senior economist at the nonprofit think tank Economic Policy Institute, said the bill’s passage can’t come soon enough.
“It is clear that policymakers need to step up right now to provide relief, and the $1.9 trillion relief and recovery bill is at the scale of the problem and is essential for a robust and equitable recovery,” she wrote.
She also called for more aid to local and state governments. Biden’s American Rescue Plan includes about $350 billion in emergency funding for those entities.
“Given that state and local governments face many new expenses in figuring out how to open schools safely, it is imperative that additional aid be provided to state and local governments so that new costs won’t squeeze out necessary hiring,” Gould wrote. “Policymakers must not shortchange aid to state and local governments, which is essential to a robust recovery.”
Joel Naroff of Naroff Economics said the loosening of coronavirus restrictions is resulting in a hiring surge in the industries hit hardest by the pandemic.
“The pandemic has played havoc with so much of the world and the economic data reflect the ups and downs of the closures, restrictions and reopenings,” he wrote. “We are now in the positive portion of the process and those sectors that were hurt the most are starting to come back.”
He expects job growth to remain strong in the coming months but said the true economic reckoning has been pushed off until 2022.
“The issue is how quickly does the unemployment rate come down and where do we wind up at the end of the year,” Naroff said. “That is critical since it is likely that the upcoming stimulus bill will be the last stimulus bill. Thus, businesses will eventually have to start making money the old-fashioned way: They will have to earn it rather than being supported by Uncle Sam.”
Also on Friday, the Commerce Department reported that the trade deficit – the difference between the goods and services the United States sells and buys from other countries – grew to $68.2 billion in January, up from $67 billion the month before.
Naroff said that is typical for an economy on the rebound.
“Both export and imports increased, which is what you want to see. Since import levels are significantly higher than exports, you need export growth to greatly exceed imports for the deficit to narrow,” he said. “With the U.S. expanding more rapidly than most other industrialized nations, we should expect the deficit to keep widening for an extended period.”
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