The U.S.economy created a blockbuster 678,000 jobs in February, adding momentum to a robust recovery that is rapidly returning the labor market to its pre-pandemic boom.As the omicron variant of the novel coronavirus receded, the unemployment rate fell to a new pandemic low of 3.8 percent last month, from 4 percent in January, the Labor Department said Friday.Average hourly wages, meanwhile, held steady, climbing by a mere 1 cent.Annual wages have risen 5.1 percent, although they have not kept up with inflation.
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The rosy picture caps off a string of 10 straight months of strong growth with the economy picking up a record 7 million jobs over the past year and setting the stage for a full recovery by this summer, a little more than two years after the pandemic plunged the country into recession.“Covid is loosening its grip — the virus ruled through fear and that fear is fading,” said Austan Goolsbee, an economics professor at the University of Chicago.“You see that around the country, as people are willing to go back out to jobs they weren’t willing to take in the midst of the pandemic.”Job gains continued to be most pronounced in service industries, such as hospitality, health care and construction, that have scrambled to hire enough workers to keep up with booming demand.“We saw broad-based gains in every sector — in trucking, warehousing, construction, leisure and hospitality, even in nursing homes,” Labor Secretary Marty Walsh said in an interview.“Ninety percent of the jobs lost in March and April of 2020 have been recovered.”Friday’s jobs report was based on surveys conducted in mid-February before Russia’s invasion of Ukraine and does not reflect the geopolitical crisis on the U.S labor market.
And though economists say it’s unclear exactly how the war might affect American jobs, they note that skyrocketing energy prices, slowdowns in consumer spending or looming uncertainty could prompt businesses to pause hiring in the coming weeks.For now, workers have been pouring back into the labor market.The unemployment rate, which counts only those who actively looked for work in the past month, is at its lowest level in two years.
A broader measure of unemployment, which includes those who want a job but aren’t actively looking for one, dropped to 4.7 percent in February, nearing its pre-crisis rate of 4.3 percent.“People are coming back to work,” said Nick Bunker, an economist at the jobs site Indeed.“We’ve been seeing this trend since last fall, but it’s become very stark recently, particularly among people of prime working age between 25 and 54.”Indeed, the tight labor market — in which job openings continue to outnumber job-seekers — has forced businesses to change their recruiting and hiring strategies.
Employers of all kinds are fast-tracking their hiring processes and in some cases, promising on-the-spot offers to lock in candidates, particularly in retail and hospitality.The Home Depot, for example, which plans to hire 100,000 employees by spring, is touting an “accelerated hiring process” that could land candidates an offer within 24 hours of applying.In Mesa, Ariz., Inwook Kim got a job less than two weeks after applying for a position as a graphic designer at an IT consulting firm.He was pleasantly surprised, he says, by how smooth the process was — and how much more money he’s making than at his last job.“They wanted to hire someone very quickly,” the 30-year-old said.
“I had two interviews, and that was it.”But some economists say the tide may be turning.
February’s dramatic pick-up in hiring, combined with stalling wage growth, could signal a shift in the labor market.“One of the consequences of people returning to the labor force is that employers will be less desperate to find the workers they want,” said Elise Gould, an economist at the Economic Policy Institute, a left-leaning think tank.“There could be a cost to wage growth in the near future.”For now, the strong jobs report raises pressure on the Federal Reserve to hike interest rates when it meets later this month and contributes to concerns that tight labor markets could be driving up inflation, which is already at a 40-year high.Fed Chair Jerome H.Powell told lawmakers this week that the central bank is planning to raise interest rates even though the fallout of the Russia-Ukraine war on the U.S.economy remains “highly uncertain.”“It is appropriate for us to move ahead,” Powell said Wednesday.
“Inflation is high, too high.”The pandemic dealt a sudden blow to the labor market, causing the unemployment rate to soar to double digits in early 2020 as employers of all sizes laid off and furloughed workers.But in the months since, companies have rapidly hired back workers.In another positive sign, the number of Americans filing jobless claims — 215,000 as of last week — fell to its lowest level since Jan.1, the Labor Department said Thursday.“We saw record job gains in 2021, setting us up for a 2022 where the fundamentals of the labor market are still very strong,” said Daniel Zhao, chief economist at jobs site Glassdoor.Sabrina Zanolini recently landed a software engineering position in Philadelphia after two months of searching.
She applied to about 50 jobs and interviewed for six before getting an offer from defense giant Lockheed Martin.“It took a while to find entry-level openings but once I did, it happened very quickly,” said Zanolini, 22, who graduated from Penn State in December.“Almost all of my friends — nine out of 10 of them — were able to get full-time employment pretty much immediately after school.”.
