The jobs report released by the Bureau of Labor Statistics on April 3, 2021 shows very solid gains in the job market that significantly surpass most economic forecasts and bode well for the proposition that the quickening pace of our recovery is indeed sustainable.
With the unemployment rate dropping to 6% (down .2% from last month) and with 916k new jobs being added in March along with the upward revisions of jobs gains by over 100k each in January and February, it appears that prospects for economic resurgence in the new year look better than ever before. In fact, March 2021 was the best month for job gains since August of 2020.
Some other encouraging metrics include a reduction in temporary layoffs of about 200k and an increase in the labor force participation rate of nearly 2% with 350k people returning to the labor pool. None of these figures represent huge changes relative to the ground that must still be made up in terms of pandemic-related job losses in general, but they are definitely steps in the right direction nonetheless.
A substantial portion of the jobs that were added last month are from the industries that had been most depleted by the effects of the pandemic, including major gains in the leisure and hospitality industries of 280k jobs, for example. It remains to be seen what proportion of the jobs returning to these industries represent projected demand, experienced demand, and/or continuing business model refinements in response to pandemic-induced consumer behavior adaptations.
The governmental sector accounted for the next largest number of jobs added (136k), largely spurred on by the rehiring of teachers and school staff as students are increasingly heading back to the classroom. The construction industry also did particularly well in adding over 100k jobs last month after having suffered some likely weather-related jobs the month prior. In fact, all employment categories across the board achieved positive job growth through March with the exception of the information sector which lost 2 thousand jobs.
It’s also worth noting that the percentage of the labor force that has worked remotely as a result of the pandemic at some point in the past 4 weeks is down by almost 2 percentage points. Those figures show that more than 1/5th of the entire labor force in the US are still counted among employees forced to work remotely at least in part, but the continuing reduction in the size of this group of teleworkers will be interesting to watch as we approach the transition into a post-COVID-19 economy.
Despite all the seemingly positive indicators that the report points to, however, it’s also important to ground these updates in the context of the nearly 8 million fewer employed Americans than there were prior to the pandemic with the labor force itself is still down by about 4 million active participants. The economic rebound experienced last summer and into the fall was considerable, but there is still a significant hole to climb out of before we get out of the red and reach pre-pandemic employment levels again.
Given that there is much work yet to be done, however, and despite the many uncertainties that lie ahead including viral variants, voluntary vaccines, and vernal vacationing, there is good reason to be positive about our country’s revival as the wheels of the economy continue picking up speed. Even with the potential impacts of a 4th wave of infections looming large, the jobs report seems to show that the momentum being established by the recovery is not only quickening but also appears to display some resilience and optimism going forward, which is certainly good news beyond just the jobs gains and improving economic conditions themselves.
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