US employers added 379,000 jobs last month, the most since October

Leisure and hospitality industries power employment numbers, signalling rapid rebound

The US economy added 379,000 jobs in February, a level that surpassed analysts’ estimates but remains below the rate needed to regain the more than 9 million jobs lost since last year.

The unemployment rate dropped a tenth of a percentage point to 6.2 per cent.

The gains were driven by large increases in the leisure and hospitality sector, which added 355,000 jobs, as coronavirus-related restrictions eased over the course of the month in many jurisdictions. Most of that was from gains of about 286,000 at restaurants, bars and other food service establishments.

Employment in the sector is still down 3.5 million positions from where it was one year ago.

“The job gains should be seen as fairly modest,” said Julia Pollak, a labor economist at ZipRecruiter.

“They do not yet signal a rapid rebound, but rather the slow reawakening of the labour market after the covid-19 winter.”

Other sectors gaining jobs included temporary help services, which added 53,000 jobs, health care and social assistance, which added 46,000 jobs and retail, which added 41,000 jobs. Clothing stores suffered, losing 20,000 jobs. Manufacturing ticked up by 21,000, while construction fell by 61,000, a decline that was likely driven in part by severe winter weather, the Bureau of Labour Statistics noted.

Economists agreed that the data for the month was positive overall, but was complicated by a few factors.

Shoots of recovery

Daniel Zhao, senior economist at Glassdoor, noted that the jobs growth in industries like leisure and hospitality was likely due more to those sectors recovering from job loss in December and January and less than making gains back into the initial pool of jobs lost early last year. “Today’s report is showing green shoots of the recovery poking out of the snow,” said Zhao.

“But the growth is a little bit weaker than headline numbers imply . ... It’s good that these businesses are recalling workers, but it points more to the fact that these businesses are crawling out of the hole from December, rather than the hole that opened up in April and May. It doesn’t necessarily look like incremental growth.”

Drew Matus, an economist and chief market strategist at MetLife Investment Management, said that he was concerned that the average hours worked for all workers declined by about 18 minutes a week — hundreds of thousands of jobs worth of hours went multiplied by the entire working population.

“The scale of the decline is quite big,” he said.

“This report tells me things are looking up if vaccine administration continues, but we’re still not out of the woods yet.”