3 takeaways latest from the jobs report

According to the jobs report released this month by the U.S. Bureau of Labor Statistics, the economy added 379,000 jobs in February, beating expectations. That is a significant improvement over January, when the economy added only 166,000. It is also about twice the average monthly job gain before the pandemic.

Nevertheless, given that the economy is still down 9.5 million jobs since a year earlier — and 11.9 million jobs below its healthy PRE-COVID-19 trend — the job gains should be seen as fairly modest. They do not yet signal a rapid rebound, but rather the slow reawakening of the labor market after the COVID-19 winter.

Here are some key takeaways from the report:

1. The leisure and hospitality sector is finally reviving

Before the pandemic, about 11% of workers were employed in the leisure and hospitality sector, which includes hotels, restaurants, spectator sports, theaters and museums. But the sector is a much larger share of the economy in some states, like Nevada, where it typically accounts for 25% of employment. And it was responsible for a disproportionate share of the job losses at the start of the pandemic: 37%.

As of the February jobs report, it is still down 3.5 million jobs, or 20%, year-over-year. But, encouragingly, it was responsible for the vast majority of the job gains that month — 355,000 of the 379,000 economywide total. The gains were concentrated in the following industries:

• Restaurants: +286,000

• Hotels: +36,000

• Entertainment: +33,000

Even though the gains were heavily concentrated in one sector, more industries across the economy contributed job gains than losses overall, which is an encouraging sign that a modest jobs recovery is resuming more broadly.

2. Very few workers returned to the labor market

The labor force expanded by only 50,000 and is still 4.2 million smaller than it was a year earlier. Many Americans clearly face barriers to returning to work, such as continued school closures and reduced public transportation. The decline has been uneven, with the white male labor force contracting 2.2% in a year but the Hispanic female labor force contracting 4.4% and the Black female labor force contracting 5.6%.

3. State and local government education was the weak point of the report

Even before the February report, employment in the education sector had tumbled, with yearover-year employment changes ranging from -25% in sports and recreation instruction to -6% in elementary and secondary schools. Instead of leading the recovery or cushioning the job losses in other industries, state and local government education departments shed yet more jobs in February.

There is a risk that reduced education budgets, staffing cuts and school closures could cause long-term scarring in the labor market in the form of reduced skills and productivity, increased dropout rates, ballooning student debt levels and youth mental health problems. Making up for the recent disruptions to education by restoring access and quality will need to be a key priority in the coming months.