Recruitment increased in February as U.S. economic activity rose amid a gradual drop in Covid-19 cases and vaccines provided hope for further growth.
The Labor Department reported on Friday that non-farm payrolls rose 379,000 during the month and the unemployment rate fell to 6.2%. This compared to expectations of 210,000 new jobs and the unemployment rate will remain stable compared to 6.3% in January.
An alternative measure of unemployment that includes discouraged and part-time workers for economic reasons remained unchanged at 11.1%.
“Today’s work report sets an extremely positive tone as we move forward in warmer months and the pace of COVID-19 vaccines is accelerating,” said Tony Bedikian, head of global markets at Citizens Bank. “While the job market still has a lot of ground to make up for, we are in a different place than we were a year ago and the economy seems poised for a strong rebound.”
Almost all labor profits came from the battered leisure and hospitality sector, which experienced an increase of 355,000 amid a easing of gastronomic restrictions in some areas. Bars and restaurants won 286,000 jobs, while hotel-related hiring was 36,000 and entertainment, recreation and recreation companies totaled 33,000.
Despite the gains, the industry still does not reach 3.5 million of its employment level a year ago, just before the worst of the pandemic. The recovery in hiring lowered the unemployment rate in the sector to 13.5% compared to 15.9% a month ago; the accommodation and food services subsector saw its unemployment rate fall to 12.7%, from 15.3%.
“We’re seeing great opportunities within the service sectors,” said Amy Glaser, senior vice president of national personnel firm Adecco. “We expect the weather to continue to be warmer [hospitality] the sector will start to explode in the next eight or twelve weeks. “
Futures on the stock market rose sharply after the report, with Dow industrialists pointing to a 235-point rise. Yields on government bonds were also higher.
Friday’s report showed that hiring was also stronger in January than initially reported, with this month’s accounting revised up to 166,000 from 49,000. However, the December count was revised below 227,000 to 306,000.
Health jobs in February rose 46,000, while retail companies added 41,000. Manufacturing also saw an increase of 21,000.
Several sectors suffered losses.
Local and state government education jobs fell 69,000 together, while construction fell by 61,000 and mining lost 8,000.
In all, there were still 8.5 million fewer Americans employed in February compared to a year ago, a total that fell only slightly from January. The size of the labor force increased by 50,000, but the labor force participation rate remained stable at 61.4%, a decrease of 1.9 percentage points from the previous year.
The average working week also decreased during the month, falling 0.3 hours to 34.6 hours.
Employment growth had slowed by the end of 2020, amid an increase in cases and renewed renewals imposed by the government during the winter. However, most economic indicators continued to rise and first-quarter GDP growth is expected to defy previous expectations of a flat or only slightly better environment.
Federal Reserve officials have been closely watching job figures not only for overall payroll growth and falling unemployment, but also for the breadth of job recovery. The central bank has pledged not to raise interest rates until it sees gains spread across income, gender and racial lines, even if that means risking higher inflation.
In February, there was bad news: the unemployment rate for blacks rose to 9.9% from 9.2% a month ago. The rate for Hispanics drops to 8.5% from 8.6%, while the rate for Asians fell to 5.1% from 6.6%.
Fed Chairman Jerome Powell reiterated that stance on Thursday, saying he does not anticipate the U.S. economy will meet central bank targets at any time this year.
Despite the February gain, the labor market still has a long way to go, and millions of workers displaced by the pandemic are still looking for work. Recent indicators show that job offers continue to rise, but at a much slower pace than needed for a full recovery.