The numbers: The U.S. created 379,000 new jobs in February — the biggest gain in four months — in what’s likely to be a preview of a surge in hiring in the months ahead as most people get vaccinated and the economy fully reopens.
The increase in hiring last month was concentrated at businesses such as restaurants, retailers, hotels and entertainment venues as states eased restrictions on customer limits and public gatherings. Most other industries also added workers.
Hiring was also much stronger in January than initially reported.
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The official unemployment rate, meanwhile, slipped to 6.2% from 6.3%, although economists widely believe the real rate is much higher.
Federal Reserve officials peg the jobless rate at closer to 10% after adjusting the data for distortions caused by the pandemic.
The rebound in job creation in February is likely the start of a major new cycle of hiring. Warmer weather, falling coronavirus cases, rising vaccinations and another massive increase in federal stimulus are likely to act as jet fuel for the economy in the spring and summer, Wall Street pros and Fed officials say.
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The increase in new jobs easily exceeded Wall Street expectations. Economists surveyed by Dow Jones and The Wall Street Journal had forecast 210,000 new jobs. Stocks rose in premarket trading.
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What happened: New jobs in leisure and hospitality — restaurants, hotels, casinos, theaters and the like — surged by 355,000 last month to account for most of the hiring in February.
These companies had lost more than 500,000 jobs in December and January after coronavirus cases reached a crescendo and the weather turned cold.
Hiring is likely to spring back even stronger in the months ahead as the weather warms and Americans fell more confident traveling, dining out, going to a game or visiting a museum or amusement park.
Professional firms also added 63,000 employees — though most were temporary — while health-care providers and retailers both filled 40,000-plus jobs. Manufacturers chipped in with 21,000 new hires
Read: Manufacturers grow at fastest pace since pandemic
Employment in construction fell by a surprising 61,000 even though companies are desperately seeking to hire. Poor weather last month was the main culprit.
Home sales have soared during the pandemic, but builders are facing a shortage of skilled workers that probably won’t ease up even if the pandemic does.
State and local governments also shed 86,000 jobs last month, mostly in education, but the decline likely reflects seasonal distortions tied to the pandemic. Private-sector hiring rose an even stronger 465,000 in February when government is excluded.
A smallish 50,000 people, meanwhile, rejoined the labor force in February, but that still means some 4.2 million people have gone missing during the pandemic. Those people are no longer counted in the official unemployment rate, making it artificially low.
The number of jobs created in January was revised up sharply to 166,000 from 49,000. The employment decline in December was raised to 306,000 from 227,000, however.
The big picture: The economy is poised to start growing by leaps and bounds again after a tough winter — if the coronavirus vaccines prove very effective.
An effective vaccine will allow states to remove all restrictions, let Americans go about their lives again without fear for their safety and give companies the incentive to hire. Fresh government financial aid will only add to the budding momentum.
What they are saying? “With vaccine distribution continuing to accelerate and with the economy in the initial stages of a reopening, the coming months should see robust gains,” said chief economist Curt Long of the National Association of Federally Insured Credit Unions.
‘The engine of economic recovery is restarting as the pandemic’s winter wave recedes, although there is still a long way to go,” said senior economist Daniel Zhao of Glassdoor. “The economy would need to add almost 1 million jobs a month for the rest of 2021 to return to pre-crisis levels by the end of the year.”
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open higher in Friday trades.