February’s jobs report doesn’t let Congress off the hook

Yay for a strong jobs report, finally! And yet: No way, no how, should this news let Congress off the hook for more stimulus, whatever Republicans might say today.

Employers added 379,000 jobs in February, the Bureau of Labor Statistics reported Friday. That was the fastest pace of hirings since October, and more gains than had been expected. Most of the hiring came in the struggling leisure and hospitality sector (primarily at restaurants and bars). The unemployment rate also ticked down, to 6.2% from 6.3% in January. This decline happened for the “right” reasons: that is, because more people got jobs, not because more people gave up looking for work and stopped being counted as unemployed.

Falling covid infections, rising daily vaccinations and fewer business restrictions are all helping normal economic activity resume. This is worth celebrating! Still: The economic crisis and the suffering it has caused are nowhere close to over.

Even with February’s growth, the economy is still very deep in the hole. By more than 9 million jobs, to be precise. The jobs deficit - the share of jobs that are “missing” relative to when the recession began - is nearly as large today as it was at the worst point of the Great Recession. And the Great Recession was, uh, pretty awful.

While February’s faster job growth represented progress, it’s still not good enough. If employment were to continue growing at February’s pace - so, 379,000 new jobs per month - it would take two more years to reach the level of jobs that existed pre-pandemic. And that still undershoots the goal, because the working-age population has continued growing. So we really want more jobs than existed when the pandemic began, rather than merely a recovery of jobs lost. Even in the industry that showed the most improvement last month, this jobs hole remains huge.

Hopefully the pace of rehiring will accelerate as vaccinations pick up and the pandemic abates. But lingering weak spots in the economy suggest the ramp-up may be slower than workers need it to be.

State and local government education shed an additional 69,000 jobs last month. As schools reopen, those job losses might partly reverse, but absent more federal aid, many state and local governments might have difficulty finding funds to rehire.

The number of long-term unemployed (those out of work for at least six months) barely budged in February and is up by 3 million from a year earlier. These people account for 41.5% of total unemployment; that’s not so far below the high from the Great Recession. Historically, the longer people are out of work, the harder it is for them to find new employment, whether due to skill deterioration, stigma, lost contacts or other factors.

Already, the labor force (that is, the number of people either working or actively looking for work) shrank by about 4.2 million people over the past year. The research firm Capital Economics recently calculated that nearly 40% of this labor-force decline is due to “early” retirements -- that is, older people who probably would have continued working for a few years if the job market had been stronger, but instead retired and now are unlikely to ever return to employment.

The Senate has just passed another round of fiscal relief.

The most urgent deadline for this $1.9 trillion package involves preventing the expiration of federal unemployment programs, which are set to lapse in about a week. But there’s lots of other necessary stuff in the legislation too - including support for businesses, child care, rental assistance and so on.

Is the bill perfect? Definitely not. If I had my druthers, I’d probably extend funding for more weeks of unemployment benefits and instructional time for kids -and allocate less for, say, pensions. I’d probably save or reallocate some money for long-term priorities such as infrastructure or investments in children.

But on the whole, another round of federal aid is still economically necessary. Moreover it’s tremendously popular. This latest jobs report, as encouraging as it is, should not reduce pressure to get this bill over the finish line.