The US labor market is heading towards a post-pandemic world, with a steady stream of adults joining the workforce and employment approaching levels before Covid-19 began its rapid spread.
The bosses Added 678,000 workers to their salaries The Labor Department said Friday in February, the largest gain in seven months. The unemployment rate fell to 3.8% from 4.0% in the previous month, approaching more than 50-year low at 3.5% Hit just before the epidemic.
More than 300,000 people have joined the workforce, and the ranks of those who report being unable to work due to Covid-19 have fallen by 1.8 million. cool wage growtha sign that a nationwide labor shortage may ease as employers fill long-dormant low-wage positions.
The hotels, restaurants, theme parks and other hospitality industries led the way in hiring as companies sought to accommodate an increasing number of vacationers, conference attendees and business travelers. States and major cities have in recent days lifted some of the remaining Covid restrictions, which could boost business and employment.
Friday’s job numbers were a result of household and business surveys in mid-February, so the effects, if any, were not shown. Russia’s invasion of Ukraine last week It was on the economy. Big threats loom, including a Sharp rise in oil prices Economists said that could hamper household spending and ultimately derail the recovery of the economy and the labor market.
“We get a preview of what the post-pandemic job market might look like,” said Daniel Chow, chief economist at Glassdoor. ‘Labour market fundamentals are still strong.’
The rapid decline in the unemployment rate – from 6.2% a year ago and the highest level after World War II reached 14.7% in April 2020— can encourage The Federal Reserve on the move to raise interest rates Some economists said, for the first time since the pandemic began in March 2020. Federal Reserve Chairman Jerome Powell told Congress this week that he plans to propose a quarter-percentage point increase at the Fed’s March 15-16 meeting to combat high inflation.
Overshadowed by strong job numbers Investors fear the intensification of the Russian military offensive in Ukraine. The Dow Jones Industrial Average fell 179.86 points, or 0.53%, to 33,614.80. The S&P 500 fell 34.62 points, or 0.79%, to 4,328.87.
Economists said three shifts could lead to stronger job growth this spring.
The first is the steady decline in cases of the virus. The second is the move by some states and cities in recent days such as Washington, New York, California and Hawaii to lift rules requiring customers to be vaccinated and to wear masks. The third is a possible drop in family savings, which may put pressure on people to return to the labor market to collect their salaries, especially with rising inflation and stock market volatility.
The number of US jobs is still 2.1 million, or 1.4%, less than it was in February 2020. That gap will close in a matter of months at the current pace of employment. Since October, the economy has created three million jobs.
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While Covid-19 infections are down sharply from their January peak, the epidemic is far from over. Many industries say so They are still struggling to find workers; Job opportunities remain close to record levels and Workers continue to quit smoking at record ratesoften for better-paying jobs, leaving many companies understaffed.
Employers such as hotel operator Garn Development are desperate to fill positions, especially those that are at the entry level, to absorb strong spending by families.
Reservations across the company’s hotels in Utah and several other western states were up nearly 60% last year from 2020 and continue to rise this year, said Gabe Garn, COO of the family-owned company. Garn said hotel managers have had to clean rooms, serve food and do other tasks normally reserved for low-paid employees due to a labor shortage.
More about the employment report
While the company has had some lucky job openings lately, many workers quit soon after being hired for better pay in other industries.
“Almost the second you don’t get the schedule you want, you just have to leave and look for something else because recruitment is everywhere,” Mr. Garn said. “Now when we are interviewing, it is as if we are selling ourselves for the way the employee is selling themselves to us. Now you have to convince them that you deserve them in exchange for the opposite.”
The hospitality industry – among the sectors hardest hit during the pandemic due to the sharp drop in travel – accounted for one in every 4 new jobs across the US in February. But the gains were broad and covered office jobs, construction, health care and other sectors. The Department of Labor has also reviewed job growth in the past two months.
Strong demand for employment in such industries appears to benefit groups that usually have higher levels of unemployment. The unemployment rate for workers without a high school diploma fell to 4.3% last month, the lowest level in records dating back to 1992. The unemployment rate for black workers fell 0.3 percentage points to 6.6%, although the rate remained twice as high as white workers. . The unemployment rate for Hispanic workers fell half a percentage point to 4.4%.
The drop in unemployment came from people who remained unemployed for a short period of time. The number of people out of work for less than five weeks fell by 286,000, while those without work for six months or more remained flat.
Several shifts seem to be helping the industry and other service providers fill jobs.
high wages It is likely to entice workers back into the workforce, particularly as the cost of living and family savings fall — while still at a historically high level after stimulus checks and unemployment insurance from the federal government last year.
Average hourly wages for private sector workers last month grew just a penny compared to January, after five consecutive months during which they grew at least a cent. Average wages fell last month for manufacturing, education, health and hospitality workers. However, overall, workers earned 5.1% more in February than they did a year ago.
The labor force participation rate – the percentage of people working or looking for work – rose to 62.3% from 62.2%. But it remained 1.1 percentage points below the pre-pandemic level. Some economists doubt whether the price will ever fully recover. Many elderly workers Retire early during the pandemicImmigration has fallen sharply.
The labor market may approach – or may be or exceed – the level of employment that can be sustained without triggering stronger inflation. This poses a dilemma for the Federal Reserve. With inflation hitting 7.5% in January – well above the central bank’s 2% target – the Fed plans to raise interest rates several times this year to prevent the economy from overheating. But policymakers want to do this at a pace modest enough to enable continued job growth.
The Fed predicted in December that long-term unemployment would stabilize at 4%.
Pulling more workers off the sidelines could be difficult, said Stephen Stanley, chief economist at Amherst Pierpont. The proportion of adults aged 25-54 with a job is only a percentage point lower than it was in February 2020. It is estimated that there are nearly a million workers in that age group on the margins. “The idea that there are millions of marginalized workers waiting to return to looking for jobs soon is probably incorrect,” he said in a note to clients. “The labor market is almost completely overheated due to very strong demand, a situation that is unlikely to reverse for some time.”
write to Josh Mitchell at [email protected]
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