Economy shows signs of life
Nation adds 379,000 jobs in February; unemployment drops to 6.2%
U.S. employers added a surprisingly robust 379,000 jobs last month in a sign the economy is strengthening as virus cases drop, vaccinations ramp up, Americans spend more and states ease business restrictions.
The February gain marked a sharp pickup from the 166,000 jobs that were added in January and the loss of 306,000 in December. Yet it represents just a fraction of the roughly 9.5 million that the economy must regain to get back to where it was before the crisis.
Unemployment fell from 6.3% to 6.2%, the Labor Department reported Friday. That is down dramatically from 14.8% last April, just after the virus erupted in the United States. But it’s well above the pre-pandemic rate of 3.5%.
“The recovery really has some legs, some momentum now,” said Odeta Kushi, deputy chief economist at First American Financial Corp.
In suggesting the economy is on the mend, the strong jobs report could complicate President Biden’s struggle to push through his $1.9 trillion COVID-19 relief package, which passed the House and is before the Senate.
It would provide, among other things, $1,400 checks to most adults, hundreds more in weekly unemployment benefits and another round of aid to small businesses at a time when many Americans have seen their income shrivel and have fallen behind on rent, mortgages and other bills.
Biden said Friday that previous government aid had contributed to February’s job gains, and he insisted the new package is needed to help keep the recovery going.
“Without a rescue plan, the gains are going to slow,” he said. “We can’t afford one step forward and two steps backward.”
About 4 million people who have lost their jobs have stopped looking for work and so are not classified as unemployed. If they were included, along with a separate group that was misclassified as working, the unemployment rate would be 9.3%, according to Oxford Economics.
Still, one year after the pandemic triggered a sud- den recession, economists are increasingly optimistic that hiring will accelerate in the coming months as Americans seize the opportunity to once again travel, shop, attend sporting events, go to the movies and eat at restaurants.
Households as a whole have accumulated a huge pile of savings as Americans slashed their spending. Much of that is expected to be spent once people feel more comfortable about going out.
Last month’s job growth was driven by a steady recovery of bars, restaurants and hotels.
Also hiring last month were retailers, which added 41,000 jobs, health care companies, with 46,000, and manufacturers, with 21,000. On the other hand, construction companies shed 61,000 jobs, most likely in part because of the severe storms and power outages in Texas.