WASHINGTON- The economy created the most jobs in March as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance in decades this year.
The closely watched Labor Department employment report on Friday suggested that the unemployment market has finally turned around after a ditch hit in December. All industries added jobs last month and more people joined the labour force. A measure of the economy's ability to create employment also improved.
But the road to full recovery remains long; more than four million Americans have been unemployed for over six months. The economy is roaring back to life, said Brian Bethune.
The non-farm payrolls rose by 916,000 jobs last month, the biggest gain since August last.
The February data was revised higher to show 379,000 jobs created instead of the previously reported 468,000. However, unemployment remains 8.4 million jobs below its peak in February 2020. Economists polled by Reuters had the April 67,000 jobs increased in their job market.
The unemployment report marked a painful anniversary for the labor market.
The March 2020 employment report was the first to reflect the mandatory closings of non-essential businesses such as restaurants, bars and gyms to slow the onset of the just-emerging COVID 19 pandemic. It was almost 1.7 million jobs lost that month, and another 20.7 million would disappear in April.
Economists estimate it could take at least two years to recoup the more than 22 million jobs lost during the pandemic. Job gains last month were led by the leisure and hospitality sector, where employers employed 280,000 workers.
Restaurants and bars accounted for nearly two-thirds of the industry's employment gains. After being depressed by harsh weather in February, construction employment rebounded by 110,000 jobs. Other schools also increased as more schools resumed in-person learning and other school-related activities.
The dollar was lower against a basket of currencies and the U.S. Treasury prices were stable.
The U.S. stock market is closed for Good Friday; as of Tuesday morning, according to the U.S. Centers for Disease Control and Prevention, the United States had distributed 147.6 million doses of COVID-19 vaccines in the country and administered 189.5 million doses. The president ’ s multi-million dollars pandemic relief package that was approved in March sends additional$ 1,400 checks to qualified households and fresh funding for businesses. Economists expect job growth to be at least 700,000 per month in the second and third quarters.
This, combined with the fiscal stimulus and about$ 19 trillion in pent up savings accumulated by households during the pandemic, is expected to unleash a powerful wave of excess demand.
Estimates of gross domestic product are as high as an annualized rate of 10.0%.
The economy grew at a 4.3% pace in the fourth quarter. Growth this year could top 7%, which would be the fastest since 1984.
In 2020, the economy contracted 3.5%, the worst performance in 74 years. The unemployment rate, from 6.0% in February to 6.0% in 2017 fell. The unemployment rate has been understated by people misclassifying themselves as being absent from work but who were engaged in employment. Without the misclassification, the unemployment rate would have been 6.4% in March.
But the labor market is making progress- in March, about 347,000 people joined the labor force. That lifts the labor force participation rate, or the proportion of working Americans who have a job or are looking for one, to 61.5% from 1995 to 2002 The ratio population-to-the economy, viewed as a measure of an economy's ability to create employment, increased to 57.8% in the last month from 57.6% in the previous month. However, long-term unemployment is increasing; about 4.218 million people are unemployed for more than 27 weeks, accounting for 43.4% of the 9.7 million people classified as unemployed last month.
The labor market recovered in February, but we still have a long way to go before substantial progress is made and the labor market fully returns, said Charlie Ripley, senior investment strategist at Allianz Investment Management.