U.S. Employment Climbs In March, Especially In Leisure And Hospitality Markets
Last week, the U.S. Bureau of Labor Statistics announced that nonfarm employment in the U.S. increased by 916,000 in March, dropping the country’s unemployment rate from 6.2 percent to six percent. And while the number of jobs is still 8.4 million below that of February 2020 levels, the labor force participation rate slightly increased from 61.4 to 61.5 percent. March’s job growth followed the addition of 468,000 jobs in February, and reflecting this trend, the Conference Board’s Employment Trends Index significantly increased in March. It ended the month at 102.44, up from 100.01 in February, and is currently up 7.7 percent from a year ago.
“The Employment Trends Index significantly increased in March and signals that job growth will be very strong over the coming months,” says Gad Levanon, head of The Conference Board Labor Markets Institute. “Despite the recent increase in infection rates, the vaccination campaign is progressing at a rate that should significantly reduce the spread of the virus in the next couple of months. Labor-intensive in-person services will continue to reopen, and consumers flush with cash due to a year of elevated savings and strong government stimulus will be willing and able to spend. All this will lead to historically fast employment growth in the coming quarters. We expect the unemployment rate to reach about four percent a year from now, and further decline for the rest of 2022. Tight labor markets and labor shortages will resurface in the coming year, leading to faster wage growth.”
Speaking on the U.S. Bureau of Labor Statistics’ employment numbers, Frank Steemers, senior economist at The Conference Board, adds, “For the second month in a row, most jobs were gained in leisure and hospitality—280,000 jobs in March after 384,000 jobs in February—and concentrated in food and drinking places. When restrictions on traveling and in-person entertainment are eased, large bounce-backs in employment in accommodation and arts, entertainment and recreation are anticipated—both industries are still respectively 30 percent and 28 percent below February 2020 employment levels. Construction gained 110,000 jobs in March after job losses in February related to inclement weather.”
Steemers notes, “The labor market outlook for the remainder of 2021 appears to be strong, despite the recent uptick in the number of new cases, as more people are getting vaccinated and state restrictions on consumer and business activity are being eased across the country. Job gains should especially benefit Black and Latino workers since they are overrepresented in the hard-hit in-person services industries. In addition, a better labor market outlook should also pull more people back into the labor force, especially women as they accounted for 55 percent of the job losses since the start of the pandemic. In March, 492,000 women joined the labor force, the largest increase since June 2020, while for the third consecutive month, men have dropped out of the labor force.”