According to today’s BLS employment report, America added 916,000 jobs in March and its unemployment rate fell to 6%. Employment figures for previous months were revised higher. This was an absolute home run of a jobs report. It’s as if the economy is facing Orioles’ pitching (it’s going to be a rough season for my hometown team).
At this point, we’ve recovered about 62% of the jobs lost during the first two months of the pandemic. At March’s rate of job creation, we will reach full recovery by October 2021—just in time for the World Series.
It may feel like the economy is rounding third, but there’s a long way to go until we reach full recovery. The U.S. labor force is still 3.9 million people short of February 2020 levels, and 4.2 million Americans have been unemployed for 27 weeks or longer. The labor force participation rate remained stuck at 61.5% last month, which means that there are a lot of people still behaving as if they’re on the disabled list.
I recently predicted that the U.S. will add more than 2 million jobs during the second quarter of 2021. If March’s rate of job creation holds for the next 3 months, it would put that figure closer to 3 million, and with stimulus, stimulus, stimulus and vaccines, vaccines, vaccines (by day’s end, about 100 million Americans will have received at least one dose), adding millions of jobs over the next few months should be a cinch.
Running from third to home shouldn’t be taken for granted, and the economy could stumble over inflationary pressures, shortages of key inputs ranging from softwood lumber to semiconductors, or a ballooning national debt. Both auto and furniture manufacturers shed jobs in March, in large measure because of pricey and difficult to obtain inputs. Still, a tsunami of stimulus will overwhelm all headwinds for now, and it’s quite possible that America will grow more rapidly than China this year for the first time in decades.
You can read more of my hard-hitting insights regarding the construction industry’s employment situation at Associated Builders and Contractors.
Three Key Takeaways
Public school employment, which has been hammered by COVID-19, rose by 125,600 net new jobs in March. Employment in the segment is still 782,900 lower than it was in March 2020, but that hints at significant upside.
Restaurants and bars added 175,800 jobs in March, but still need to add another 1.1 million jobs to return to March 2020 levels. Expect hiring in this segment to accelerate rapidly during the months ahead as Orioles and Pirates fans drink away the pain.
The median duration of unemployment has increased from 5.8 weeks as of March 2020 to 19.7 weeks as of March 2021. The reabsorption of long-term unemployed workers will be critical to reaching full recovery.
What to Watch
Inflation, inflation, inflation. Whether or not the Federal Reserve or the Treasury Department believes it, the inflation risk is every bit as real as the Dodgers winning another World Series.
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The American Rescue Plan 101: Anirban Basu Explains the $1.9 Trillion Stimulus Package
I’m delivering a special webinar (I can’t help it) on Wednesday, April 7th at 1:00 EST, during which I’ll dive into the details of the American Rescue Plan, crack a few nonthreatening, sufficiently PG jokes, and answer any and all questions. I’ve given a couple thousand presentations over the years and this is the first one produced by our company, Sage Policy Group (exciting, right?). It’s limited to 500 attendees and you can kindly register at this link.