(CN) — American employers added a whopping 678,000 new jobs last month while the unemployment rate dropped to 3.8%, a pandemic-era low.
The February jobs report released by the Labor Department on Friday morning shows the economy is still on a hot streak after adding a revised 481,000 jobs in January. The robust growth last month beat economists’ expectations of about 400,000 new jobs.
Reported cases of the omicron variant of Covid-19 have been on a steady decline since peaking in January, no doubt a contributing factor to the strong labor market recovery in recent months.
“If we see more numbers like this moving forward, we can be optimistic about this year,” wrote Nick Bunker, economic research director at Indeed Hiring Lab. “Employment is growing at a strong rate and joblessness is getting closer and closer to pre-pandemic levels.”
The economy is averaging 582,000 new jobs a month so far this year, a rate Bunker said would return payrolls to pre-pandemic levels by June.
“If there are no road bumps, this could be a very good summer,” he said.
Job growth in February was driven by big gains in leisure and hospitality, the industry hit hardest by the pandemic. It added 179,000 positions, including 124,000 at food and drinking establishments and 28,000 in accommodation. The industry is still down 1.5 million jobs since February 2020.
Professional and business services added 95,000 jobs last month. The sector is up 596,000 jobs compared to its pre-pandemic level, thanks to 240,000 new positions in temporary help services, 154,000 in computer systems design and 152,000 in management and technical consulting.
Health care payrolls increased by 64,000 in February, while notable gains were also seen in construction (60,000), transportation and warehousing (48,000), retail (37,000) and manufacturing (36,000). Government employment was little changed.
Meanwhile, the unemployment rate fell from 4% to 3.8%, the lowest level in the Covid-19 era. The jobless rate was 3.5% just before the pandemic began.
“Two years have passed since the last pre-pandemic jobs report. Over that time we have seen dramatic swings as tens of millions of workers lost their jobs, millions were recalled to old jobs, and wages have surged to entice others to take new positions,” Bunker wrote. “Now heading into spring of 2022, the labor market is set to return to a semblance of what we were seeing back in February 2020.”
President Joe Biden noted Friday that 7.4 million jobs have been added since he took office in January 2021. Overall, the economy is still down 2.1 million jobs since February 2020.
“This progress is the result of the new economic approach I talked about in the State of the Union—grow the economy from the bottom up and middle out. And it’s a result of our success combatting Covid-19 and moving forward safely,” Biden said in a statement.
He added, “While we must tackle head on the challenge families are facing with rising costs, today’s report underscores that the United States is uniquely well positioned to deal with the challenge that inflation has posed across the world as we recover from the pandemic.”
The surge in hiring this year comes amid a drop in concern about the coronavirus. A poll released last week by the Associated Press-NORC Center for Public Affairs Research shows just 24% of Americans are very worried about themselves or a family member being infected with Covid-19, down from 36% in December and January, when the omicron variant caused a spike in infections nationwide.
As the jobs market continues its recovery and inflation becomes the main economic concern, the Federal Reserve is expected to raise interest rates this month. Fed Chair Jerome Powell said in late January the economy is “much stronger” now than it was in 2015 when the central bank began raising interest rates following the last economic downturn.
Michael Pearce, senior U.S. economist at Capital Economics, said in a statement Friday that “the real economy has considerable momentum.”
“That will give the Fed greater confidence to push ahead with its planned policy tightening but, with wage growth now leveling off, there is arguably less pressure for officials to front-load an aggressive series of rate hikes over the coming months,” Pearce said.
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