The surprising February job gains and declines in the unemployment rate are paving the way for the full recovery from the coronavirus recession, according to economists.
The United States added 379,000 jobs last month, more than double what analysts had expected, and saw the unemployment rate drop to 6.2 percent, the lowest level since March 2020.
While the February employment report showed signs of an accelerating recovery, labor earnings were only a drop compared to the deep damage accumulated in the labor market over the past year. The deceptively low unemployment rate also ignores the millions of Americans that COVID-19 has been forced to leave the workforce and its disproportionate weight to women of color.
“The numbers are not debatable, they are not doubtful, they are not confusing. It is clear. Millions of Americans have left the workforce and this is not good for our economy and it is definitely not good for the continued growth of the economy, ”said Michelle Holder, a labor economist at John Jay College in New York.
February employment gains were an undeniable improvement over the meager January 49,000 increase, and included signs of companies preparing for a post-pandemic economy. The strong leisure and hospitality sector added 355,000 jobs, mainly to restaurants and bars that had long been hampered by coronavirus restrictions.
However, the notable gain in this sector covers just over a tenth of the 3.5 million jobs in this field claimed by COVID-19 that have not yet been replaced.
The United States has continued to drop about 9.5 million jobs since the start of the pandemic, more than the total decline in employment during the Great Recession, an abyss that would take more than two years to fill in the February pace.
Elise Gould, a senior economist at the Institute for Economic Policy, calculated that employers should add one more. 2.4 million jobs to cover those that would have been gained if COVID-19 had never derailed the economy.
“Going back to pre-recession levels would not come close to filling the total job gap,” he wrote.
The pandemic’s only toll has also made the unemployment rate — the number of unemployed people divided by the number of people working or trying to find work — almost useless in measuring the health of the labor market.
More than 4 million Americans have stopped looking for work because of the pandemic, according to the February job report, with many leaving the workforce to care for school-age children, caring for members of the pandemic. sick family or avoid getting the virus. Since the unemployment rate does not include those who are not looking for work, many Americans who would otherwise want to work are not represented in this main figure.
Federal Reserve Chairman Jerome Powell said during a speech last month – when the unemployment rate was 6.3% – that the unemployment rate, including lost workers, would be closer to 10%.
As the unemployment rate fell slightly in February, the labor force participation rate remained at 61.4%, 1.9 percentage points lower than a year ago. The employment / population ratio (the proportion of adults of working age with jobs) also remained unchanged, at 57.3 percent, a decrease of 3.5 percentage points compared to February 2020.
“This does not mean that the main unemployment rate is incorrect, simply that, in a pandemic, having a complete view of the economy requires looking at the data in various ways,” he wrote. Cecilia Rouse
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The unemployment rate often deflates during prolonged recessions when eligible workers lose confidence in the job market and stop looking for work. While the same dynamic suppressed the unemployment rate during the Great Recession, the pandemic has turned it into an excess with devastating consequences for women and people of color.
Rouse estimated that while black women accounted for only 14 percent of the female labor force in February 2020, they have since accounted for 26 percent of women leaving the workforce. Similarly, Hispanic women accounted for 17 percent of the female workforce a year ago, but they are 27 percent of women who have left.
Overall, 2.3 million women and 1.8 million men have stopped looking for work, and economists say more help will be needed from the federal government to get them back to work.
“Today’s employment report, combined with previous months’ reviews and retail sales pattern, underscores the reliance on federal aid to keep the recovery going, ”wrote Diane Swonk, chief economist at Grant Thornton, who highlighted the January increase in consumer spending that followed The December Relief Package was signed into law.
“Much of what was intended for low-wage families struggling with unemployment is expected to expire again in mid-March,” he wrote. “We’re still in a very deep hole.”
Biden and Congress Democrats are trying to pass a $ 1.9 trillion economic relief bill with an extension of expanded unemployment benefits before they expire on March 14th. While these unemployment programs will expire briefly, the rapid disbursement of another round of stimulus checks could help ease income loss for troubled families.
“Those gains are going too slow,” Biden said Friday at the White House. “We can’t go back two.”
Economists argue that the United States is still ready for a strong rebound once the country achieves herd immunity (potentially in mid-summer) and can return to normal life. And while economists acknowledge that there is light at the end of the tunnel, they say the tunnel can be much longer than it looks now.
“It simply came to our notice then [the unemployment rate] continue to go down, whether abruptly or not, but I am concerned about the degree to which we will be able to return to the American workforce the people who have disassociated themselves from it, ”Holder said.