(March 5) The U.S. economy added back more jobs in February than in January, as easing COVID-19 case counts and a ramping vaccine rollout allowed distancing restrictions to begin to moderate.
The U.S. Labor Department released its February jobs report Friday morning at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus estimates compiled by Bloomberg:
- Non-farm payrolls: +379,000 vs. +200,000 expected and +49,000 in January
- Unemployment rate: 6.2% vs. 6.3% expected and 6.3% in January
- Average hourly earnings, month-over-month: 0.2% vs. 0.2% expected and 0.2% in January
- Average hourly earnings, year-over-year: 5.3% vs. 5.3% expected and 5.4% in January
The February jobs report comes on the heels of back-to-back disappointments in each of the January and December reports. The economy added atepid 49,000 payrolls in January,according to the unrevised print, and had lost payrolls on net for the first time since Aprilin December.Overall, the U.S. economy remains about 9.9 million payrolls short of its pre-pandemic levels.
But last month, job growth was expected to have accelerated as declining new COVID-19 cases and broadening vaccine-conferred immunity helped more businesses reopen with greater capacity. The unemployment rate was expected to hold at 6.3%, or well below the pandemic-era high of 14.8%, but still above the 50-year-low of 3.5% from February 2020.
The breakdown of job gains and declines by industry was set to be of particular interest in the latest jobs report, given that job losses during the pandemic have been so heavily concentrated in high-contact services industries, and especially at restaurants, bars, hotels and their ilk.
In December and January,service-related jobs bore the brunt of payroll declines, as a resurgence in new COVID-19 cases around the holidays led to renewed social distancing restrictions. Leisure and hospitality payrolls dropped by 61,000 in January, following a plunge of more than half a million in December. But these losses may have at least begun to soften in February.
"As the pace of new COVID-19 cases steadily declined, restaurant activity accelerated in February, suggesting an increase in food service employment," Nomura chief economist Lewis Alexander said in a note on Wednesday. "That strength continued into March based on preliminary data, consistent with our view that private employment growth should begin to recover more rapidly in the late spring as vaccinations continue and restrictions are eased."
Some other temporary factors may have added pressure to the labor market in February, including the inclement weather that blanketed much of the country mid-month. This may cause some unevenness in the data reported in the Labor Department's monthly household survey, which includes the unemployment rate, and establishment survey, which includes the change in non-farm payrolls, some economists noted.
"Colder than usual weather in February likely weighed on certain sectors, including construction, retail and food services," Morgan Stanley economist Ellen Zentner wrote in a note Wednesday. "This may have differentiated effects on the household and establishment sides of the report — whether they are employed, but 'not at work due to weather' in the household survey, or if they missed paychecks then that would also be reflected in the establishment survey."
Other reports on the U.S. labor market have come in mixed recently.ADP reported Wednesday that private payrolls increased by just 117,000in February, sharply missing estimates for a rise of 205,000 payrolls. But elsewhere,weekly jobless claims trended lower in Februaryversus January, suggesting a moderation in the number of newly unemployed.Plus, the Conference Board's labor differential— measuring the percentage of those saying jobs are "plentiful" subtracted by those claiming jobs are "hard to get" — turned positive for the first time since November in February.
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