The job market in February showed some stronger than expected growth, with 379,000 new payroll jobs created. The market has bounced back somewhat from its weak performance in January (which was also revised upward).
The largest bulks of these jobs were created in leisure and hospitality, which accounted for 355,000 of the new jobs. Employment in the retail sector sector also grew by 41,000.
These were the same sectors that have been pummeled in recent months by the resurgence of the Covid-19 virus around the country. Apparently, Americans are getting comfortable again going to stores and restaurants, with the pace of vaccinations accelerating and spring approaching.
Data from the household side of the market were considerably less upbeat, and they indicate that major problems in the job market remain. The unemployment rate is at 6.2%, the labor force participation rate at 61.4%, and the employment rate out of the population at 57.6% – all barely budged from January. Those employed part-time for economic reasons remains about 4% of the labor force. All of these rates remain substantially worse than they were a year ago.
And a disturbingly large number of workers will face longer-lasting problems, and will not be so quickly employable when business demand picks up. For instance, about 3.5 million workers have permanently lost their jobs; over 4 million are now among the long-term unemployed (defined as those who have been unemployed for over 6 months). These figures do not include the roughly 5 million people who have left the labor force. Getting all of these workers back into jobs, with the requisite skills, will be challenging.
The American Rescue Plan (ARP) will likely be passed by Congress very soon and signed by President Biden. This package, plus the pickup of vaccinations, promise a substantial surge in demand for workers and hiring over the coming months. But the long-term unemployed, permanently displaced, and workers who have left the job market will need more targeted assistance getting hired and trained.
This will remain our greatest challenge during the recovery that lies ahead.
I am the LaFarge SJ Professor of Public Policy at the McCourt School of Public Policy, Georgetown University. I am also a senior fellow in Economic Studies at Brookings,