Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Vaccines, fiscal stimulus power U.S. employment; economy blooming

EconomyApr 02, 2021 04:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Construction workers wait in line to do a temperature test to return to the job site 2/2

By Lucia Mutikani

WASHINGTON (Reuters) - The U.S. economy created the most jobs in seven months in March as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance this year in nearly four decades.

The Labor Department's closely watched employment report on Friday also showed job gains in February were larger than initially estimated. The best first two months of employment growth of any administration in history suggested the labor market has finally turned the corner.

All industries added jobs and many people rejoined the labor force. A measure of the economy's ability to create employment also improved. But the road to full recovery remains long. The jobs deficit is still huge and more than four million Americans have been unemployed for over six months.

President Joe Biden welcomed the job growth spurt.

"The first two months of our administration has seen more new jobs created than the first two months of any administration in history," Biden told reporters. "It's a reflection of two things going on here, a new economic strategy focused on building from the bottom to the middle up, and one that puts government on the side of working people."Nonfarm payrolls surged by 916,000 jobs last month, the biggest gain since last August. Data for February was revised higher to show 468,000 jobs created instead of the previously reported 379,000. Still, employment remains 8.4 million jobs below its peak in February 2020.

Economists polled by Reuters had forecast payrolls increasing by 647,000 jobs in March. At the current pace, many believe the more than 22 million jobs lost during the pandemic could be recouped by the end of next year.

The economy added 1.6 million jobs in the first quarter.

The strong gains could play into fears of the economy over heating, even as ample slack remains. The Federal Reserve has signaled it would maintain its ultra easy monetary policy stance for a while to allow complete healing.

"The economy is booming," said Chris Low, chief economist at FHN Financial in New York. "If vaccines result in low enough COVID numbers to allow significant further service-sector reopening, the Fed will have to start discussing a taper, and update its guidance, before the end of this year."

(GRAPHIC - Substantial further progress for the Fed? Substantial further progress for the Fed?: https://graphics.reuters.com/USA-ECONOMY/FEDPROGRESS/nmovazmdypa/chart.png)Job growth last month was led by the leisure and hospitality sector, where employers hired 280,000 workers. Restaurants and bars accounted for nearly two-thirds of the industry's employment gains. Construction employment rebounded by 110,000 after being depressed by harsh weather in February.

Manufacturers hired 53,000 employees. Public and private

education payrolls also rose as more schools resumed in-person learning and other school-related activities. Retailers also added jobs, while mining employment increased by the most since 1981.

(GRAPHIC - U.S. factory hiring was broadbased in March: https://fingfx.thomsonreuters.com/gfx/mkt/bdwpkmxzzpm/Pasted%20image%201617369776960.png)

As of Friday morning, the United States had administered 157.6 million doses of COVID-19 vaccines in the country and distributed 204.7 million doses, according to the U.S. Centers for Disease Control and Prevention. On Friday, the CDC said fully vaccinated people could safely travel at "low risk," which could help accelerate the services industry recovery.

The Biden administration's massive $1.9 trillion pandemic relief package approved in March is sending additional $1,400 checks to qualified households and fresh funding for businesses.

Economists expect job growth will average about 700,000 per month in the second and third quarters. That, combined with the fiscal stimulus and about $19 trillion in excess savings accumulated by households during the pandemic, is expected to unleash a powerful wave of pent-up demand.   

First-quarter gross domestic product estimates are as high as an annualized rate of 10.0%. Growth this year could top 7%, which would be the fastest since 1984. The economy contracted 3.5% in 2020, the worst performance in 74 years.

The dollar rose versus a basket of currencies. U.S. Treasury prices were mixed. Wall Street is closed for Good Friday.

POWERFUL TAILWIND

First-quarter growth prospects got a boost from workers putting in longer hours in March as temperatures rose. The average workweek rose to 34.9 hours from 34.6 hours. That, together with robust hiring lifted aggregate hours 1.5%.

Though average hourly earnings slipped 0.1% as the lower-wage leisure and hospitality industry dominated payroll growth, a proxy for take home pay increased 1.4%.

"The powerful tailwind of the reopening of economic activity appears to be gathering force," said Michael Feroli, chief U.S. economist at JPMorgan (NYSE:JPM) in New York.

(GRAPHIC - The jobs hole facing Biden and the Fed: https://graphics.reuters.com/USA-ECONOMY/JOBS/xlbpgygrnpq/chart.png)

The unemployment rate fell to 6.0% last month from 6.2% in February. The unemployment rate has been understated by people misclassifying themselves as being "employed but absent from work." Without the misclassification, the unemployment rate would have been 6.4% in March.

Even so, a broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to a one-year low of 10.7% after holding at 11.1% for two straight months.

About 347,000 people, mostly women, re-entered the labor force in March. The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose to 61.5% from 61.4% in February.

The employment-to-population ratio, viewed as a measure of an economy's ability to create employment, increased to 57.8% from 57.6% in the prior month. But about 4.218 million people have been out of work for more than 27 weeks, accounting for 43.4% of the 9.7 million people classified as unemployed last month. That was up from 41.5% in February.

"Overall, the aggressive policy support and speed of this cycle should limit labor market scarring," said Sarah House, a senior economist at Wells Fargo (NYSE:WFC) Securities in Charlotte, North Carolina.

Vaccines, fiscal stimulus power U.S. employment; economy blooming
 

Related Articles

U.S. job openings hit record high in March
U.S. job openings hit record high in March By Reuters - May 11, 2021 3

By Lucia Mutikani WASHINGTON (Reuters) - U.S. job openings surged to a record high in March, further evidence that a shortage of workers was hampering job growth, even as nearly...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (15)
Vlad Lozovskiy
Vlad Lozovskiy Apr 02, 2021 9:02PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
When Trump was in power they repeated that economy is in trouble.  Now it is Biden, so economy is blooming!!!!
President Xi Jinping
President Xi Jinping Apr 02, 2021 5:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Exciting times! Dont be the ones to miss it at all these foreign downers want to see america fail.
andrew lee
andrew lee Apr 02, 2021 5:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I tot it's america and it's kimosabes want to see china fail
Todd Gray
Todd Gray Apr 02, 2021 5:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
gov. lies about unemployment, and everything else. real unemployment rate is 9-10%. they way they factor unemployment is they've dropped off the 3 to 4% who've given up looking. nothing in this country reflects reality anymore. its leaders can't stomach facing what they've done.
Dave Jones
Dave Jones Apr 02, 2021 3:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wow economy gangbusters! ok then let interest rates rise and stop doing QE. And start paying off the national debt!
Todd Gray
Todd Gray Apr 02, 2021 3:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
good point. Goldman, and many others, were touting buy at the top of the 08 crash, as they now do again. gov doesn't care if working people lose their money. they created the pattern day trade rule, but let the big investment houses keep lying to the people. problem never solved.
Adamo Nals
Adamo Nals Apr 02, 2021 2:44PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
All i can say is short the qqq with e everything you got. This is good for economy. But the absolute last thing the market ESPECIALLY tech wanted to see. Period. 2% will be here next week
Kenneth nelson
grasshopper Apr 02, 2021 1:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Take away the $400 extra unemployment benefit and the rate would drop real fast
Larry Deangelis
Larry Deangelis Apr 02, 2021 1:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I believe it is 300$ grasshopper!
President Xi Jinping
President Xi Jinping Apr 02, 2021 1:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ignore the chinese propaganda agents posing as others (Diddl One), keep on swimming!
Diddl One
Diddl One Apr 02, 2021 1:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
been called all sorts of things. that one is new. :-) thanks, I add that to my list.
andrew lee
andrew lee Apr 02, 2021 1:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
ya just focus on the american propaganda
Diddl One
Diddl One Apr 02, 2021 1:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Never trust statistics unless you have falsified them yourself. This is number mambo jambo for the mathematically challenged. Real interesting number is 650.000. That's how many US$ every single American is in debt thanks to FED, Federal ans State Governments.
Joel Hauser
Joel Hauser Apr 02, 2021 1:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wooo hooo jobs are coming back baby.President Joe Biden the FDR of our generation.
Mir Chang
Mir Chang Apr 02, 2021 1:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Roaring twenties part 2 man
Dave Jones
Dave Jones Apr 02, 2021 11:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
doesn't make sense if more people are claiming unemployment yet more jobs created? Is there a surge in the population?
CHAD TENDIES
CHAD TENDIES Apr 02, 2021 10:54AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We are losing more jobs each week than at the worst parts of the global financial crisis in 08. 700k jobs lost every week
Ojibara Fuhad
Ojibara Fuhad Apr 02, 2021 9:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The media trying to cover for biden
Tre Hsi
Tre Hsi Apr 02, 2021 9:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
did you really have to use your second trolll handle to post the same message?
Catholic Man
CatholicMan Apr 02, 2021 9:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The media trying to cover for biden.
Casador Del Oso
Casador Del Oso Apr 02, 2021 9:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Stimulus is an artificial catalyst t boost the economy. Once removed the economy will need to stand on it's own with tax increases and interest rates hikes. Look out below!
Ojibara Fuhad
Ojibara Fuhad Apr 02, 2021 9:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
please am a new here I have not no what this app means
taylor jason
taylor jason Apr 02, 2021 9:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
taxes rate is already expected to increase from 21 to 28% there is no mystery there -- however interest rate hikes wont happen for quite some time simply because the Fed is not really worried anymore about temporary spikes in inflation rather they are more concerned about their second mandate which is full employment which we are still a ways off
Steve Lora
Steve Lora Apr 02, 2021 1:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Jobs were voluntarily shut down by Democrat facist governors. Never lost. Now the same jobs are being told to go back and appear as if Biden created a new one. Democrats are con artist.
Show previous replies (2)
Me comment
Me comment Apr 02, 2021 1:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
eddie eddie eddie you appear again.
YouTube Account
YouTube Account Apr 02, 2021 1:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Tre Hsi  rent free
Tre Hsi
Tre Hsi Apr 02, 2021 1:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
YouTube Account  "rent free" --  I think that's what Matt Gaetz's teenager girlfriends received for their "services"
taylor jason
taylor jason Apr 02, 2021 1:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
i hope you were wearing your tin foil hat when you wrote this comment or else biden will come looking for you!
Benjamin McIntire
Benjamin McIntire Apr 02, 2021 1:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Steve has been getting fed his info from youtube algo again
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email