Jump in hiring fuels optimism for economic recovery

WASHINGTON >> 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 jobs that the economy must regain to return to pre-pandemic levels.

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.

The strong jobs report, in suggesting the economy is on the mend, could complicate President Joe 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, more money for 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.

“We’re always happy to see positive jobs numbers,” Brian Deese, Biden’s top economic adviser, said on CNBC. “What you’re seeing is that we still have a long way to go.”

For one thing, about 4 million people who have lost jobs have stopped looking for work and so are not classified as unemployed. If those 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 sudden 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. Bars and restaurants, in particular, snapped back, adding 286,000 jobs as business restrictions eased in California and other states. This week, Texas joined some other states in announcing it will fully reopen its economy.

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. With demand for new housing strong, most analysts expect that figure will rebound strongly next month.