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US recovery picks up speed as employment surges 916,000 in March

The US pandemic recovery picked up speed in March with a massive rebound in employment, according to government data released Friday, gains driven by business reopenings and accelerating vaccinations.

But the data also show the signs of remaining damage after more than a year of shutdowns and restrictions due to Covid-19.

The economy regained 916,000 jobs in March, the biggest increase since August, with nearly a third of the increase in the hard-hit leisure and hospitality sector, the Labor Department reported.

The rise in hiring pushed the unemployment rate down to 6.0 percent from 6.2 percent in February.

However, even as the economy begins to recover from the Covid-19 shutdowns, employment is still 8.4 million jobs lower than the pre-pandemic peak, the report said.

The gain in nonfarm payrolls, which far exceeded the consensus estimate among economists, reflects the accelerating recovery as vaccinations become more widespread, as well as the injection of more government stimulus which sent cash to most households and expanded support to businesses.

And with upward revisions to hiring in the first two months of 2021, employment in January and February combined was 156,000 higher than previously reported, the report said.

Hiring was widespread in manufacturing, construction and education, but leisure and hospitality which bore the brunt of the shutdowns topped the list, regaining 280,000 — 176,000 of those in restaurants and bars.

Labor economist Diane Swonk of Grant Thornton almost exactly predicted the blockbuster report. She said before the release that the rebound was due to “ramping up vaccinations, lifting restrictions on indoor venues and reopening schools for in-person learning combined with spring break” and increased air travel.

– Remaining scars –

But the data show there are still scars from the pandemic damage: Black unemployment remains little changed at 9.6 percent, and average hourly earnings fell by 4 cents to $29.96, reflecting rehiring of lower wage workers who bring down the average.

In addition, there are nearly six million more workers now than before the pandemic who either are working part time because they cannot find a full time position, or are on the sidelines because they have not been able to find work, the report said.

Robert Frick of Navy Federal Credit Union said the data offered “clues of problems we’ll face in the future … foreshadowing that moving millions of Americans back into the labor force will be an issue in the drive to return to pre-pandemic employment levels.”

But Nancy Vanden Houten of Oxford Economics predicted good times ahead, saying the economy “is poised for an impressive run in the coming months as the combination of expanding vaccine distribution and generous fiscal stimulus leads to a hiring spurt.”

Oxford is predicting a gain of 7.5 million jobs in 2021 with the unemployment rate falling to 4.3 percent.

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