U.S. Jobs: February Surge Begets March Boom

If I ever saw a graph that perfectly illustrated hitting bottom and then starting an upward climb, it would be the jobs added numbers for May 2020 through March 2021. Of course, it's also vital to understand that in the two preceding months — March and April, 2020 — the U.S. economy shed 21.5 million jobs, of which 20.8 million were lost in April alone.

Source: U.S. Bureau of Labor Statistics

We've been clawing our way back since then, with varying degrees of vigor and success. The months since August have been particularly vexing, because they've shown either only modest declines or only modest growth. December marks the nadir, with a loss of 306,000 jobs bracketed by anemic November (245,000) and January (233,000) jobs added numbers.

Now for the turn: With 916,000 jobs added for March, it's hard not to see this as a tangible sign that we're turning the corner and taking steps to put things back to a state more like that which prevailed pre-pandemic. This month's Employment Situation Summary surely makes for more positive reading material.

That said, unemployment now stands at 6 percent, with approximately 9.7 million unemployed U.S. workers still without work or paychecks. Teleworking percentages dropped from 22.7 percent in February, to 21.0 percent in March, showing a steady but slightly accelerating decline in remote WFH activity.

What the Numbers Say, In More Detail

When it comes to rebounding jobs, those sectors hardest hit by the downturn are those most likely to experience an uptick. And so it was in March, 2021. That's pretty much what we see in the employment sector data from the latest report. The high-level details look as follows:

Leisure and Hospitality: +280,000 jobs, with food services and drinking places accounting for 176,000 of that total. People are going out more, and capacity restrictions are easing, so more jobs are available.

Private and Public Education: +76,000 jobs in local government education; +50,000 in state government education; and 64,000 in private education. More kids returning to in-classroom situations means more education jobs.

Construction: +110,000 jobs reflects a change in the weather that has more people back on job sites, as more projects get back underway. Look for these numbers to keep jumping if the infrastructure bill gets passed.

Professional and Business Services: +66,000 jobs takes us almost back to pre-pandemic levels and falls across administrative and support services (+37,000), management and technical consulting (+8,000), and computer design and related services (+6,000).

Manufacturing: +53,000 jobs split across +30,000 in durable goods and +23,000 in non-durable goods. As more people get back to work, look for these numbers to climb apace.

Transportation and Warehousing: +48,000 jobs, reflecting increasing demand for e-commerce, courier and delivery services.

Other sectors except for health care and information (both mostly flat) experienced modest gains: other services (+42,000); social assistance (+25,000); retail trade (+23,000); mining (+21,000), and financial activities (+16,000).

This closer look shows that the recovery is still creeping along in most sectors except for the hardest-hit which moving more quickly to make up for more ground lost. Wages are still mostly flat as are average weekly hours worked.

Other Sources, Other Voices

NPR's headline for its reporting on the latest employment report starts with the words "Roaring Back." Most reporting puts a positive spin on this uptick in employment, but I think it's largely a disguised sigh of relief that growth is no longer stuck in low gear, and is heading away from the zero line (see graph above). One key sentence from the NPR coverage signals what kind of knife edge we're poised upon:

"Forecasters expect the job gains to continue, provided a recent uptick in coronavirus cases doesn't erupt into a full-blown wave." With recent spring breaks just ended, and Easter weekend upon us, the possibility of what some call a "fourth surge" is a potential brake on the economy which may or may not materialize.

The outlook from The Washington Post is a bit more upbeat, and says "the March data � may signal a turning point." They observe that the survey dates back to the week of March 12, the same time that the stimulus package made its way past the House and the Senate and onto President Biden's desk for signature.

The Post story also quotes Nick Bunker, economic research director at Indeed.com who says "This is a wonderful report. Hopefully we have many more months like it ahead. It's fantastic to see the big bounce back in job gains."

My own observation is that the situation looks impressive against the period from September through the present month, but that May through August of last year all showed months with 1 million or more jobs added (with June the standout at just under 5 million jobs). We are doing better, but we could do better still.

Let's hope that conditions permit the emerging positive trend to keep going, and accelerate further. At the same time, we can all keep our fingers crossed, too.