A surprising increase in jobs in February and a fall in the unemployment rate hide the long way to a full recovery after the coronavirus recession, economists say.
The US added 379,000 jobs last month, more than double what analysts had expected, and saw the unemployment rate fall to 6.2%, the lowest level since March 2020.
While the February employment report showed signs of an accelerated recovery, job gains were only a drop in the bucket compared to the deep damage to the labor market over the past year. The deceptively low unemployment rate also ignores the millions of Americans who have been forced to quit the workforce by COVID-19 and its disproportionate value on women of color.
“The numbers are not debatable, they are not dubious, they are not confusing. It’s clean. Millions of Americans have left the workforce and this is not good for our economy and it is certainly not good for further economic growth, ”said Michelle Holder, a labor economist at John Jay College in New York.
Employment gains in February were an indisputable improvement over the weak January growth of 49,000 and included signs that businesses are preparing for a post-pandemic economy. The hard-hit leisure and hospitality sector added 355,000 jobs, mainly to restaurants and bars that have long been hampered by coronavirus restrictions.
Even so, the remarkable gain in this sector covers just over a tenth of the 3.5 million jobs in this field claimed by COVID-19 that have yet to be replaced.
The US is still declining by about 9.5 million jobs since the beginning of the pandemic, more than the total decline in employment during the Great Recession, a gap that would take more than two years to fill in. February.
Elise Gould, senior economist at the Institute for Economic Policy, calculated that employers should add a supplement 2.4 million jobs to cover what would have been gained if COVID-19 had never derailed the economy.
“Returning to pre-recession levels would not be close to filling the total job gap,” she wrote.
The unique pandemic number has also made the unemployment rate – the number of people unable to find work divided by the number of people employed or trying to find a job – almost useless to measure the health of the labor market.
More than 4 million Americans have stopped looking for work because of the pandemic, according to the February job report, with many leaving the workforce to care for school-age children, to care for sick family members or to avoid contracting the virus. Because the unemployment rate does not include those who are not looking for a job, many Americans who would otherwise want to work are not represented in this main figure.
Federal Reserve Chairman Jerome Powell said in a speech last month – when the unemployment rate was 6.3 percent – that an unemployment rate, including those lost workers, would be closer to 10 percent.
As the unemployment rate fell slightly in February, the labor force participation rate remained at 61.4 percent, 1.9 percentage points lower than a year ago. The employment-to-population ratio – the ratio of working-age adults to jobs – was also unchanged at 57.3%, down 3.5 percentage points from February 2020.
“This does not mean that the main unemployment rate is wrong, simply that, in a pandemic, having a complete picture of the economy requires analyzing the data in several ways,” he wrote. Cecilia Rouse
Cecilia RouseCBC “unequivocally” supports Shalanda Young for White House budget chief Hill’s Morning Report – Presented by Facebook – Demons Senate faces unity test; Tanden nomination falls on money: Tanden withdraws nomination as Biden budget chief Aid bill tests reduce the democratic majority The Senate confirms the election of Biden for trade, top economist WH MORE, Chairman of the White House Council of Economic Advisers, in an analysis on Friday.
The unemployment rate is often deflated during prolonged recessions, when eligible workers lose confidence in the labor market and no longer look for jobs. While the same dynamic suppressed the unemployment rate during the Great Recession, the pandemic threw it in excess with devastating consequences for women and people of color.
Rouse calculated that while black women accounted for only 14% of the female workforce in February 2020, they have since accounted for 26% of the female workforce. Similarly, Hispanic women accounted for 17% of the female workforce a year ago, but 27% of women left.
Overall, 2.3 million women and 1.8 million men have stopped looking for jobs, and economists say more help will be needed from the federal government to bring them back to the ground.
“Today’s job report, combined with reviews from previous months and the retail model, highlights how dependent on federal aid the recovery remains,” wrote Diane Swonk, chief economist at Grant Thornton, noting the January increase in spending. consumer aid that followed The December aid package is signed into law.
“Much of what was intended for low-wage households struggling with unemployment is scheduled to fall again in mid-March,” she wrote. “We’re still in a very deep hole.”
Biden and Democrats in Congress are trying to pass a $ 1.9 trillion economic aid bill, with an extension of extended unemployment benefits, before expiring on March 14. While these unemployment programs will soon be gone, quick payments for another round of incentive checks could help reduce lost income for struggling families.
“These gains are going too slowly,” Biden said at the White House on Friday. “We can’t take a step forward and two steps back.”
Economists say the US is still poised for a strong recovery once the country achieves herd immunity – potentially by mid-summer – and can return to a normal appearance of life. And while economists acknowledge that there is a light at the end of the tunnel, they say the tunnel could be much longer than it looks now.
“I expect [the unemployment rate] let’s keep going down, whether it’s sudden or not, but I’m worried about the degree to which we’re able to bring people back into the American workforce who have retired from it, “Holder said.