Last month saw the addition of more than half a million new jobs compared to the previous months reports, indicating an even stronger and sturdier economy than most experts had anticipated.
The unemployment rate dropped another 0.2% over the month down to 4.6%, which is still more than one percentage point above the unemployment rate during February 2020 (prior to the start of the pandemic-induced recession).
It’s important to note that the difference between 4.6% and 3.5% unemployment accounts for more than 1.5 million people–a significant number impacted by what amounts to less than a 1% shift in labor participation. That said, it’s critical to consider the current 4.6% unemployment figure in contexts beyond the pre- and post-pandemic framing.
For example, a 4.6% unemployment rate was reported in January 2007, in what would later be deemed one of the last few months before the ensuing financial crisis. An unemployment rate that low would not be seen again for nearly a decade in 2016. In fact, since World War II, the average annual unemployment rate has been higher than 4.6% almost 70% of the time, in which light 4.6% unemployment appears to be a pretty good spot.
While the gains last month were demographically concentrated among adult men, the gains were distributed broadly throughout various industries. In fact, the only industry to see declining employment over the past month was public education, for which continued turmoil surrounding mandated mask and vaccination policies; school board meetings; and curriculum could be a contributing factor.
The leisure and hospitality industry tops the list of industries that saw the largest job gains last month, with 164,000 new jobs added. Over 70% of those new positions went to food and beverage services, possibly signaling a return to dining out.
Also of note were the 37,000 new jobs added in healthcare, almost one-third of which were attributed to nursing care facilities. Construction also added 44,000 new jobs, representing a gain of almost 50% over the previous month.
As a final note, a couple of particularly telling indicators about the trajectory of the pandemic appear to be foreshadowing good news. Approximately 3.8 million people reported an inability to work because of lost or reduced business due to the pandemic–a figure that is down from 5 million the month before.
In addition, the number of remote workers went from 13.2% to 11.6% over the course of the month, representing a significant reduction in the number of telecommuters as offices and in-person places of business continue to reopen. On this front, the real question is where that figure will bottom out and reach a new stasis.
Mployer Advisor’s Take:
In short, the economy looks to be in pretty good shape. While job numbers across the board have not yet returned to their pre-pandemic lows, we have reached a place that has (historically) been considered a strong economic position.
What’s more, all signs seem to be pointing toward continued progress in reaching and potentially surpassing those pre-pandemic levels. This cause will likely be accelerated by the development of Pfizer’s oral COVID-19 pill, as well as Congress’ recent passage of an infrastructure bill that includes funding substantial projects across the nation.
An end to the pandemic as we’ve known it and its negative economic impacts may truly be in sight.
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