By Eric Morath
U.S. hiring surged in March as the economic recovery
accelerated, the start of what economists say could be a sustained
run of job growth to industries, regions and workers hardest hit
during the pandemic.
U.S. employers added a seasonally adjusted 916,000 jobs in
March, the best gain since August, the Labor Department said
Friday, and the unemployment rate, determined by a separate survey,
fell to 6.0%, a pandemic low. Still, as of March, there are 8.4
million fewer jobs than in February 2020 before the pandemic
hit.
The jobs rebound is gaining renewed momentum as more people are
vaccinated against Covid-19, states lift restrictions on business
activity, and consumers grow more comfortable dining, shopping and
traveling outside their homes.
"There's a seismic shift going on in the U.S. economy," said
Beth Ann Bovino, a Ph.D. economist at S&P Global. The
confluence of additional federal stimulus, growing consumer
confidence and the feeling that the pandemic is close to abating --
despite rising infections in recent weeks -- is propelling economic
growth and hiring, she said.
Other recent data shows restaurant, hotel and airlines bookings
are up and consumers are spending more at gyms, salons and spas in
recent weeks than they have in more than a year. Consumer spending
accounts for more than two-thirds of economic demand and is an
important element of the recovery.
"Fear is subsiding, and American households are sitting on a lot
of cash" from stimulus checks and savings from reduced spending on
vacations, commuting and child care, said Dr. Bovino. "That's going
to support spending, especially in the services sector."
Yields on U.S. government bond yields rose after the jobs report
was released in an abbreviated day of trading. U.S. stock markets
were closed in observance of Good Friday.
Friday's report showed hiring rose in most industries, led by a
gain of 280,000 in the category that includes restaurants and
hotels. Employment also rose sharply in construction, most
manufacturing sectors and public and private schools. Temporary
help and auto manufacturing, where a semiconductor shortage has
idled assembly plants, were weak spots.
Nearly two million fewer Americans reported last month they were
unable to work because their employer closed or lost business due
to the pandemic and 500,000 less said they couldn't seek work due
to the pandemic. The share of employees who worked remotely due to
the coronavirus also declined last month, the Labor Department
said.
The gains could provide more employment opportunities to women
and racial minorities, who disproportionately lost jobs last year.
And job growth could pick up in hard-hit cities in the Northeast
and California, and in tourist hotbeds such as Las Vegas and
Orlando, Fla. Regional employment data for March will be available
April 16.
Some economists project job growth will top one million in
April. Further out, economists surveyed by The Wall Street Journal
project employers will add an average of 514,000 jobs each month
over the next year, for a total of more than six million. That
would mark the best 12-month stretch of job creation in decades but
leave overall employment totals below where they stood before the
pandemic.
Even with sustained hiring, industries, workers and regions
suffering the most from the pandemic still face lengthy recoveries.
Those mostly dodging the downturn -- better paid, more highly
educated workers and states that imposed lighter restrictions --
are expected to return quickly to the strong economy that existed
before the pandemic.
Stronger growth should return jobs to industries with the
deepest losses during the pandemic. Last month, restaurants and
bars added 176,000 jobs, arts, entertainment and recreation venues
added 64,000 jobs, and accommodations added 40,000 jobs. Still,
employment in the overall leisure and hospitality sector is down by
3.1 million, or 18.5% from February 2020.
The Tampa, Fla.-based Beef 'O' Brady's and Brass Tap restaurant
chains are hiring about 400 additional employees, mostly prep cooks
and dishwashers, as demand increases, said Chris Elliott, chief
executive of parent FSC Franchise Co.
The company had its best sales week on record in mid-March,
which coincided with St. Patrick's Day, the college basketball
tournaments and spring break, he said.
"Pent-up demand as Covid goes away is really strong," Mr.
Elliott said.
He added that the chains are having trouble filling open
positions, which pay between $12 and $15 an hour, because of
increased competition for workers. He said some potential employees
aren't actively looking for work, with enhanced unemployment
benefits available until September. The company is increasing
recruiting efforts and speeding up the hiring process.
"If someone comes in with an application, you talk to them that
day," Mr. Elliott said. "If you tell them to come back tomorrow,
they'll already have a job."
The economic expansion will also support additional job growth
at sectors that fared relatively well during the pandemic.
Construction added 110,000 jobs in March. Warehousing and
transportation, driven by online shopping, added 48,000 jobs. Job
gains in manufacturing sectors such as metal fabrication, machinery
and food processing offset the decrease in auto making.
Storch Products Co., a decades-old manufacturer in Livonia,
Mich., reduced staff by five workers last year, said Matt Carr, the
company's president. Since then, demand has picked up for the
industrial magnets and related machines it produces.
The company recently hired three new employees and has several
open positions in both sales and production.
"We were seeing a lot of growth before Covid, and now I feel
we're getting back to that," Mr. Carr said. "It feels like we're a
startup," he added.
Hourly shifts have increased in the Midwest, recently surpassing
the Southeast, according to the workplace software firm Ultimate
Kronos Group. While hourly work in all regions remains below
pre-pandemic levels, higher shift totals can be a precursor to
better job growth.
Areas of the country that depend largely on tourism, including
Nevada and Hawaii, should see strong hiring as many Americans start
to travel domestically again, said Gabe Ehrlich, a Ph.D. economist
at the University of Michigan.
Partial reopenings of offices will aid employment in New York,
California and other states, helping cities with some of the
highest unemployment rates in the U.S.
"Those areas are coming out of a much deeper hole than the rest
of the country," Dr. Ehrlich said.
The return of in-person-services jobs should aid in the hiring
of women, who disproportionately held those jobs lost during the
pandemic. The unemployment rate for women in March fell to 5.9%
versus the 6.2% rate for men. However, a larger share of women
dropped out of the labor force during the pandemic and many haven't
returned.
Those with lower levels of education are also seeing gains. The
unemployment rate for those with less than a high school diploma
fell to 8.2% last month from 10.1% in February. The rate also
declined for those with only a high school education, but held
nearly steady for college grads. And the return of some
lower-skilled workers likely helped push down average hourly wages
by 4 cents to $29.96.
Increased service-sector hiring could also help Latino and Black
workers, who are furthest from fully recovering job losses after
advances late in the last expansion. The unemployment rate for
Latino workers fell below 8% last month. And while the rate for
Black workers also decreased, it remains well elevated at 9.6%
"It's an open question how much trouble those groups will have
as we come out of the pandemic and hiring improves," Dr. Ehrlich
said. "When you lose your job, it can be a slippery ladder to get
back on."
Sarah Chaney Cambon contributed to this article.
Write to Eric Morath at eric.morath@wsj.com
(END) Dow Jones Newswires
April 02, 2021 13:11 ET (17:11 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.