US job market starts to revive after pandemic, could still take more than 7 years to recover fully: Report
The US economy, which has been badly hit by the Covid-19 pandemic, has started showing a turnaround. It has created more jobs in February to exceed expectations as fall in new cases of Covid-19 infections and additional pandemic relief funds from the government gave a fillip to hiring at restaurants and other business services, strongly helping the labor market to hit the recovery track, Reuters reported.
The report, which was published on Friday, March 5, however, cautioned that despite the job growth momentum expected to get a boost in the days ahead because of more vaccinations and fiscal relief, it could still take several years for the labor market to recover from the damages that the pandemic has caused. Nearly 28 million people have been infected by the deadly coronavirus in the US while over 522,000 have died.
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The US Bureau of Labor Statistics said in a report: “Total nonfarm payroll employment rose by 379,000 in February, and the unemployment rate was little changed at 6.2 percent, the US Bureau of Labor Statistics reported today. The labor market continued to reflect the impact of the coronavirus (Covid-19) pandemic. In February, most of the job gains occurred in leisure and hospitality, with smaller gains in temporary help services, health care and social assistance, retail trade, and manufacturing. Employment declined in state and local government education, construction, and mining.”
'3.5 million have lost jobs permanently'
The report also said that at least 4.1 million Americans have been out of employment for more than six months, making up more than 41 percent of the unemployed population last month. Besides, another 3.5 million have lost their jobs permanently and though it was unchanged in February, it was 2.2 million more than what it was a year earlier.
“There remains easy fuel for strong payroll gains in coming months as the reopening gains momentum,” Robert Rosener, an economist at Morgan Stanley in New York, was quoted as saying by Reuters. “But there is much further to go before conditions are consistent with maximum employment.”
Reuters reported that nonfarm payrolls rose by 379,000 jobs in February after growing by 166,000 in January. “Payrolls fell in December for the first time in eight months. The economy has recouped 12.7 million of the 22.2 million jobs lost in the pandemic recession,” it added. The economists with whom Reuters spoke made a forecast that February payrolls would grow by 182,000 jobs.
Restaurants and bars gave jobs to 286,000 people, making up 75 percent of the payrolls gain. Also businesses at hotels, motels and recreation and gambling establishments saw a rise in employment. Overall, employment in the leisure and hospitality sector rose by 355,000 jobs, making up a whopping 94 percent of all jobs created in February.
Apart from the recruitments, temporary help also chipped in while healthcare and social assistance also led to more jobs. Retailers roped in 41,000 workers while manufacturing payrolls went up by 21,000. Transportation equipment was a major contributor to factory job gains despite a global semiconductor chip shortage, which made some automakers reduce production. Employment in construction, however, fell by 61,000 jobs because of the cold weather, Reuters said, adding government payrolls dropped by 86,000, with the losses mainly concentrated at the state and local governments.
White House Press Secretary Jen Psaki said at a press briefing on Friday, March 5 that the job numbers were “unacceptable” and added that it would take two years at this rate for the employment to get to pre-pandemic levels. “It will take even longer at the average pace over the last three months,” Psaki said, adding: “While it shows progress, it also shows the long road ahead.”
'We can't go one step backward and two steps forward'
President Joe Biden cited the job report to push his Covid-19 stimulus bill, which is likely to get a final Senate backing this weekend.
“Today’s jobs report shows that the American Rescue plan is urgently needed,” Biden said during an economic briefing. The Democrat also said that the gains were likely because of the December stimulus bill and predicted “these gains are going to slow” without his relief package worth $1.9 trillion. “We can't go one step forward and two steps backward,” he said.
Gus Faucher, chief economist at PNC Financial, Pittsburgh, was quoted by Daily Mail as saying: “At this pace employment would not return to its pre-recession peak for almost seven years.”
The labor report also cited the employment scenario among the major worker groups, saying while the unemployment rate declined for Asians to 5.1 percent in February, that for adult men remained at six percent, adult women at 5.9 percent, teenagers at 13.9 percent, Whites at 5.6 percent, Blacks at 9.9 percent and Hispanics at 8.5 percent.