US job growth rises past expectations as economic recovery gets back on track

WASHINGTON: The US economy created more jobs than expected in February as falling new COVID-19 cases and additional pandemic relief money from the government boosted hiring at restaurants, putting the labour market recovery back on firmer footing.

Though job growth momentum is expected to build in the months ahead amid an acceleration in the pace of vaccinations and more fiscal stimulus, it will probably take several years for the labour market to heal from the deep scars inflicted by the pandemic, which is now in its second year, Reuters reported.

Employment report

The Labor Department’s closely watched employment report on Friday showed at least 4.1 million Americans have been out of work for more than six months, accounting for 41.5 per cent of the unemployed population in February. Another 3.5 million have permanently lost their jobs.

Federal Reserve Chair Jerome Powell on Thursday offered an optimistic view of the labour market, but cautioned a return to full employment this year was “highly unlikely.”

“Looking ahead, it appears the ship is pointed in the right direction and the additional stimulus coming from Congress should be the wind in the sails to get the economy back on track,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Nonfarm payrolls surged by 379,000 jobs last month after rising 166,000 in January. Payrolls fell in December for the first time in eight months. Employment remains 9.5 million below its pre-pandemic level. Economists polled by Reuters had forecast February payrolls increasing by 182,000 jobs.

Restaurants and bars hired 286,000 workers last month, accounting for 75 per cent of the gain in payrolls. There were also increases in employment at other leisure and hospitality businesses.

Temporary help, seen as a harbinger for future hiring, increased further. Healthcare and social assistance also added jobs, and retailers hired 41,000 workers. Manufacturing payrolls increased by 21,000 jobs. But construction employment decreased by 61,000 jobs because of the bitter cold across the country.

“At this pace, employment would not return to its pre-recession peak for almost seven years,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.