By Eric Morath
Hiring accelerated last month to the best pace since August,
signaling a stronger rebound is under way that could deliver jobs
to the industries, regions and workers hardest hit during the
coronavirus pandemic.
U.S. employers added a seasonally adjusted 916,000 jobs in
March, the Labor Department said Friday. The gain affirms an
accelerating employment trend after a recent stall and could be the
start of a prolonged stretch of strong job creation.
Meanwhile, the unemployment rate, determined by a separate
survey, fell to 6.0%, a pandemic low. Last month more job seekers
entered the labor market, which could provide a critical source of
labor for employers ramping up hiring in the coming months.
Nearly 2 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 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.
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.
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 1 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 6 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.
"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.
Even with sustained hiring, the U.S. isn't expected to fully
recover all jobs lost during the pandemic until at least the second
half of 2022. As of March, there are 8.4 million fewer jobs than in
February 2020 before the pandemic hit.
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.
"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."
Consumer spending accounts for more than two-thirds of economic
demand and is an important element of the recovery.
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.
Last month retailers added 23,000 jobs, led by clothing stores
and auto dealerships.
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. "I think it's going to be a really good year for
us."
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 on social media 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.
Manufacturing is expected to continue to grow as supply-chain
disruptions are sorted out and demand for goods rises. Job openings
in manufacturing in March were 50% above February 2020 levels,
according to the job search site Indeed. Construction-related job
openings were up 45%.
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, as well as a
new product that can attach high-grade air filters to existing
ductwork, he said.
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.
Similarly, 24% of the employers in the Midwest expect to boost
employment this spring, the highest rate of any region in the
country, according to a survey by the staffing firm ManpowerGroup.
The survey found that growth is expected in every U.S. region.
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 and fell 0.5
percentage point for those with only a high school education. The
rates for those that attend college held nearly steady. 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%
Increased hiring in tourism, child care and personal services
should help reduce unemployment for minorities. "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 11:06 ET (15:06 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.