The US labor market is ready to go – and this time few economists expect it to fall back to earth.
The Ministry of Labor will release data on hiring and unemployment in March on Friday. Forecasters surveyed by FactSet expect the report to show US employers created more than 600,000 jobs in the last month, up from 379,000 in February and the most since October.
Even better numbers are probably ahead of us. The March data was collected earlier this month, before most states expanded access to vaccines and before most Americans received $ 1,400 checks from the federal government under the latest relief package. Those forces should translate into even faster job growth in April, said Jay Bryson, Wells Fargo’s chief economist.
“If you can’t get a barn burner in March, you will likely get one in April,” he said.
Like last year, the biggest risk to the economy is: the pandemic itself. Coronavirus cases are on the rise in large parts of the country as states begin to ease restrictions. If that uptrend turns into a full-blown new wave of infections, it could force some states to step down and hinder recovery, Bryson warned.
But few economists expect winter to repeat itself when a surge in virus cases reversed the recovery. More than a quarter of adults in the United States have received at least one dose of a coronavirus vaccine, and more than two million people are vaccinated every day. This should allow economic activity to continue to recover.
“It’s different this time, and that’s because of vaccines,” said Julia Pollak, labor economist at the ZipRecruiter construction site. “It’s real this time.”
Still, it will take many months of strong growth for the labor market to return to something close to its pre-pandemic levels. The United States had roughly 9.5 million fewer jobs in February than it did in February 2020, and the gap is even wider when you factor in one year of missed job growth.
Forecasters expect the March report to show that the unemployment rate has fallen from 6.2 percent in February to 6 percent and from nearly 15 percent in April to 6 percent. However, economists caution against reading too much about the unemployment rate, which excludes millions of people who dropped out of the workforce during the pandemic, in many cases because they had to look after children while schools were closed or because they didn’t care felt safe going to work. If these people look for jobs again while the pandemic subsides – as economists hope – the official unemployment rate could be slow to recover.
“The pandemic and its aftermath have displaced so many people that short-term trends are difficult to analyze,” said Nick Bunker, research director for Indeed.