U.S. labor market roars back; full recovery still years away

[rooster59]

U.S. labor market roars back; full recovery still years away

By Lucia Mutikani

 

FILE PHOTO: Construction workers wait in line to do a temperature test to return to the job site after lunch, amid the coronavirus disease (COVID-19) outbreak, in the Manhattan borough of New York City, New York, U.S., November 10, 2020. REUTERS/Carlo Allegri

 

WASHINGTON (Reuters) - The U.S. economy created more jobs than expected in February as falling new COVID-19 infections and additional pandemic relief money from the government boosted hiring at restaurants and other services businesses, firmly putting the labor market recovery back on track.

 

Though job growth momentum is expected to build in the months ahead amid an acceleration in the pace of vaccinations and more fiscal stimulus, it will probably take several years for the labor market to heal from the deep scars inflicted by the coronavirus pandemic, which is now in its second year.

 

The Labor Department's closely watched employment report on Friday showed at least 4.1 million Americans have been out of work for more than six months, accounting for 41.5% of the unemployed population in February. Another 3.5 million have permanently lost their jobs.

 

Graphic: Unemployment duration -

 

"There remains easy fuel for strong payroll gains in coming months as the reopening gains momentum," said Robert Rosener, an economist at Morgan Stanley in New York. "But there is much further to go before conditions are consistent with maximum employment."

 

Nonfarm payrolls surged by 379,000 jobs last month after rising 166,000 in January. Payrolls fell in December for the first time in eight months. The economy has recouped 12.7 million of the 22.2 million jobs lost in the pandemic recession.

 

Economists polled by Reuters had forecast February payrolls increasing by 182,000 jobs. Restaurants and bars hired 286,000 workers, accounting for 75% of the payrolls gain. There were also increases in employment at hotels and motels and at amusements, gambling and recreation establishments.

 

Altogether, leisure and hospitality employment jumped by 355,000 jobs, making up 94% of all jobs created last month.

 

Temporary help, a harbinger for future hiring, increased further. Healthcare and social assistance also added jobs, and retailers hired 41,000 workers. Manufacturing payrolls increased by 21,000 jobs. About half of the factory job gains were in transportation equipment, despite a global semiconductor chip shortage, which has forced some automakers to cut production.

 

But construction employment decreased by 61,000 jobs because of bitter cold across the country. Government payrolls dropped by 86,000 jobs, with losses concentrated at state and local governments. The diffusion index, or measure of private industries expanding, jumped to 57.0 from 48.4 in January.

 

Unseasonably cold weather shortened the average workweek to 34.6 hours from 34.9 hours.

 

The surge in hiring follows on the heels of a strong rebound in consumer spending in January, which prompted economists to sharply upgrade their growth estimates for the first quarter.

 

A decrease in daily coronavirus cases and hospitalizations, and nearly $900 billion in stimulus provided by the government at the end of December are driving the revival in activity.

 

That has raised concerns that President Joe Biden's $1.9 trillion recovery plan under consideration by Congress, combined with the Federal Reserve's near zero interest rates and bond purchases, could cause the economy to overheat.

 

U.S. Treasury yields have spiked as investors anticipate higher inflation. Biden is not backing down.

 

"Without a rescue plan, these gains are going to slow," Biden said at a White House economic briefing. "We can't afford one step forward, two steps backward. People need the help now."

 

Fed Chair Jerome Powell on Thursday again brushed aside the inflation concerns, saying he expected the U.S. central bank "will be patient" until the economy is "very far along the road to recovery."

 

Stocks on Wall Street rallied, while the dollar rose against a basket of currencies. U.S. Treasury prices were higher.

 

Graphic: Nonfarm payrolls -

 

PLENTY OF SLACK

 

Even as the labor market recovery is regaining steam, ample slack remains. Though the unemployment rate fell to 6.2% last month from 6.3% in January, it continued to be understated by people misclassifying themselves as being "employed but absent from work." Without this problem, the unemployment rate would have been 6.7%. It is about 9.5%, including people who have given up the search for work.

 

While the share of long-term unemployed is below its peak near 45% during the Great Recession, it is far higher than in previous downturns where it rose not much above 20%.

 

"This indicates that unemployment is highly concentrated among people who lost their jobs near the start of the recession, rather than workers going through relatively short spells of unemployment," said Dean Baker, economist at the Center for Economic and Policy Research in Washington.

 

Unemployment remains high among Blacks and Hispanics, as well as Americans without a high school diploma and college degrees.

 

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, was steady at 61.4% in February. The participation rate has tumbled from 63.3% in February 2020, with women accounting for the biggest share of dropouts.

 

According to Census Bureau data, around 10 million mothers living with their own school-age children were not actively working in January, 1.4 million more than during the same month in 2020.

 

"There is still more slack in the labor market than the unemployment rate advertises," said Scott Anderson, chief economist at Bank of the West in San Francisco. "It is difficult, if not impossible, to generate sustained inflation and higher inflation expectations when the economy is still so far away from full employment."

 

(Reporting by Lucia Mutikani; Additional reporting by Trevor Hunnicutt; Editing by Chizu Nomiyama and Andrea Ricci)

 

-- © Copyright Reuters 2021-03-06

 

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[Fat is a type of crazy]

The issue now is whether the policy of Biden is still correct to spend $1,900,000,000,000 by giving direct handouts of $67,000,000,000 and loads of other stuff.  Much of it is in fact covid related and good to see the average people benefit rather than the big end of town, but boy it is a lot of dollars to spend in an economy that seems to be doing OK on its own.

Edited March 5, 2021 by Fat is a type of crazy

[Credo]

15 minutes ago, Fat is a type of crazy said:

The issue now is whether the policy of Biden is still correct to spend $1,900,000,000,000 by giving direct handouts of $67,000,000,000 and loads of other stuff.  Much of it is in fact covid related and good to see the average people benefit rather than the big end of town, but boy it is a lot of dollars to spend in an economy that seems to be doing OK on its own.

Economies are fragile things, especially early on in a recovery.  The jobs were largely in the low-end service industries, so the $1,400 will be much appreciated by them and will help to stimulate the economy.  

I don't know that they are mandated to spend ALL the money.  Hopefully, they won't have to.   

 

[Tug]

Let’s hope this continues as we banish this scourge that beeing said I hope folks continue to follow safe protocols!as soon as we get our own house in order we can start helping others!

[CrunchWrapSupreme]

Good thing Biden’s loosened up those green cards. I’ll be bringing back my Thai wife likely within his administration. She likes the idea of making 500-800 baht an hour in this hopefully recovering economy.

[Tug]

1 hour ago, CrunchWrapSupreme said:

Good thing Biden’s loosened up those green cards. I’ll be bringing back my Thai wife likely within his administration. She likes the idea of making 500-800 baht an hour in this hopefully recovering economy.

Be patient it takes them awhile to get those visas approved so plan accordingly good luck!

[Eric Loh]

Surprised that Biden didn’t bragged about this unlike the previous former President. 

3 hours ago, rooster59 said:

 

Nonfarm payrolls surged by 379,000 jobs last month after rising 166,000 in January. Payrolls fell in December for the first time in eight months. The economy has recouped 12.7 million of the 22.2 million jobs lost in the pandemic recession.

 

[placeholder]

1 hour ago, vandeventer said:

There is over 1 trillion dollars that hasn't been spent yet. And these hungry Dems. want to keep on spending until the us dollar crashes. Do they even want what's good for Americans?

Has $1 trillion in COVID-19 relief gone unspent?

• About $1 trillion remains to be disbursed, but a large share of it has been allocated or is scheduled to be spent.

• Most of the unspent money was approved in late December, and it takes time to distribute it.

• As the economy recovers, some of the money might not be spent.

https://www.politifact.com/factchecks/2021/feb/23/steve-scalise/has-1-trillion-covid-19-relief-gone-unspent/

[placeholder]

*Deleted post edited out*

 

Funny. Obama inherited from George Bush the worst recession since the Great Depression. He asked for far less than Trump did for the Covid recession but not one Republican supported him. Once they took over the House of Representatives, they never approved any more emergency assistance. But somehow right wingers still blame Obama for that slow recovery. Trump inherited from Obama an economy on an upward trajectory, yet somehow from day one of Trump's term, he got the credit from those same parties who opposed supporting Obama's recovery proposals.. When the Covid crisis hit, Democrats strongly supported the massive spending to rescue the American economy. Without their support, the US would have been in dire shape. In fact, it was the Democrats who added and augmented to those parts of the program that most helped ordinary Americans. Yet somehow you seem to think the credit should go entirely to Trump.

[Scott]

Inflammatory, off-topic, troll posts and replies removed.   Stay on topic, please.  

 

[bluebluewater]

How does this work?   New claims for unemployment go up 475K every week yet jobs created of 355K for the month and everyone has a roaring hard-on?  

[placeholder]

7 hours ago, bluebluewater said:

How does this work?   New claims for unemployment go up 475K every week yet jobs created of 355K for the month and everyone has a roaring hard-on?  

Really? 475K per week? You got a source for that?

[Solinvictus]

7 hours ago, bluebluewater said:

How does this work?   New claims for unemployment go up 475K every week yet jobs created of 355K for the month and everyone has a roaring hard-on?  

I understand your point and you do have a good one.  Besides, given the stagnant wages for years alongside low workers' benefits it's only the wealthy or the uninformed who tend to focus on these unemployment stats rather than addressing policy.

21 minutes ago, placeholder said:

Really? 475K per week? You got a source for that?

Albeit, the figures may not always be accurate but the very way they measure unemployment is off and is done in such a way to look good. How so?

 

Unemployment statistics don't consider those who are not seeking employment and those who are working only part-time.

[placeholder]

3 minutes ago, Solinvictus said:

I understand your point and you do have a good one.  Besides, given the stagnant wages for years alongside low workers' benefits it's only the wealthy or the uninformed who tend to focus on these unemployment stats rather than addressing policy.

Albeit, the figures may not always be accurate but the very way they measure unemployment is off and is done in such a way to look good. How so?

 

Unemployment statistics don't consider those who are not seeking employment and those who are working only part-time.

Really?

What is the U-6 Rate?

The U-6 rate is the unemployment rate that includes discouraged workers who have quit looking for a job and part-time workers who are seeking full-time employment. The U-6 rate is considered by many economists to be the most revealing measure of a country’s unemployment situation since it covers the percentage of the labor force that is unemployed, underemployed and discouraged.

https://www.investopedia.com/terms/u/u6-rate.asp

[nauseus]

4 hours ago, placeholder said:

Really?

What is the U-6 Rate?

The U-6 rate is the unemployment rate that includes discouraged workers who have quit looking for a job and part-time workers who are seeking full-time employment. The U-6 rate is considered by many economists to be the most revealing measure of a country’s unemployment situation since it covers the percentage of the labor force that is unemployed, underemployed and discouraged.

https://www.investopedia.com/terms/u/u6-rate.asp

 

This U-6 rate is never quoted in the headlines. Too scary. Right now it's nearly double the generally quoted unemployment number of 6.2%. 

 

The methods of, and factors used in, calculating most major economic indicators have been smeared and tweaked over the years to improve the result for political advantage of all parties. It's so bad now that few of us know what the real inflation rate is anymore. 

[placeholder]

46 minutes ago, nauseus said:

 

This U-6 rate is never quoted in the headlines. Too scary. Right now it's nearly double the generally quoted unemployment number of 6.2%. 

 

The methods of, and factors used in, calculating most major economic indicators have been smeared and tweaked over the years to improve the result for political advantage of all parties. It's so bad now that few of us know what the real inflation rate is anymore. 

About the inflation rate. A while back some people from MIT decided to track inflation using prices for things sold on the internet. It's called the Billion Prices Project. Lots of people were predicting it would show much higher inflation than the official US figures. But, in fact, the official figures tracked the BPP's very closely.

 

[placeholder]

54 minutes ago, nauseus said:

 

This U-6 rate is never quoted in the headlines. Too scary. Right now it's nearly double the generally quoted unemployment number of 6.2%. 

 

The methods of, and factors used in, calculating most major economic indicators have been smeared and tweaked over the years to improve the result for political advantage of all parties. It's so bad now that few of us know what the real inflation rate is anymore. 

You're right about the U6 generally being under reported. Still, the Reuters article specifically notes that if discouraged workers are included. the unemployment rate would be 9.5%.

Curiously enough, I didn't see conservatives doubting the govt's unemployment statistics during the previous 4 years.

[candide]

2 hours ago, placeholder said:

You're right about the U6 generally being under reported. Still, the Reuters article specifically notes that if discouraged workers are included. the unemployment rate would be 9.5%.

Curiously enough, I didn't see conservatives doubting the govt's unemployment statistics during the previous 4 years.

I checked the curves and It's quite interesting. It follows the same trend as other indicators but it seems there is an amplifying effect when there is a crisis, suggesting some people or companies are adapting by switching to part-time jobs.

[Thomas J]

On 3/6/2021 at 5:57 AM, rooster59 said:

U.S. labor market roars back; full recovery still years away

Not sure I would use the term "roaring back"  The USA uses a strange methodology when calling people unemployed.  If the person stops looking because they are discouraged, they are not unemployed.  If they accept a part time job because they cant find a full time job, they are not unemployed.  If they use to earn a much higher salary but accept a low paying position to tide them over, they are not unemployed.    The truer number of unemployed is called the U-6 unemployment rate which includes those who have dropped out of looking,  those working part time that want a full time job.  That is currently 11.1% in the USA 

https://www.bls.gov/news.release/empsit.t15.htm

[placeholder]

This is the best (and also quite brief) I've read on the current employment situation.

For the Economy, the Present Doesn’t Matter. It’s All About the Near Future.

It is generally considered bad journalistic practice to start an article this way, but it must be said: The new jobs numbers that the Labor Department released Friday morning don’t matter.

These numbers can sometimes be unimportant in the sense that any one economic report offers only a partial view of what is going on, and is subject to margins of error and future revisions...

This jobs report is inconsequential because the economy is at a momentous inflection point — what matters is not what happened in the last few weeks, but where things end up several weeks from now.

https://www.nytimes.com/2021/03/05/upshot/economy-jobs-future.html

[nauseus]

10 hours ago, placeholder said:

You're right about the U6 generally being under reported. Still, the Reuters article specifically notes that if discouraged workers are included. the unemployment rate would be 9.5%.

Curiously enough, I didn't see conservatives doubting the govt's unemployment statistics during the previous 4 years.

 

Goes back a lot longer than that.

[placeholder]

41 minutes ago, nauseus said:

 

Goes back a lot longer than that.

Really? Are you claiming that conservatives didn't doubt unemployment figures during the Obama administration?

Trump doubts government reports of low unemployment

https://www.marketplace.org/2016/08/04/trump-doubts-government-reports-low-unemployment/

[nauseus]

13 hours ago, placeholder said:

Really? Are you claiming that conservatives didn't doubt unemployment figures during the Obama administration?

Trump doubts government reports of low unemployment

https://www.marketplace.org/2016/08/04/trump-doubts-government-reports-low-unemployment/

 

I did not mention a particular political party. I am saying that the parameters for calculating things like unemployment and inflation have been shifting for decades.

[candide]

2 minutes ago, nauseus said:

 

I did not mention a particular political party. I am saying that the parameters for calculating things like unemployment and inflation have been shifting for decades.

You may well be right! In this  case, trends should be still relevant (provided there was no big change in parameters during the considered period of time).

[nauseus]

1 minute ago, candide said:

You may well be right! In this  case, trends should be still relevant (provided there was no big change in parameters during the considered period of time).

 

I wonder when food and fuel were removed from the CPI calculation?

[placeholder]

13 minutes ago, nauseus said:

 

I wonder when food and fuel were removed from the CPI calculation?

As pointed out above, the Billion Prices project proved that govt. calculations of inflation have been very accurate.

http://econbrowser.com/archives/2020/11/a-public-service-announcement-judy-shelton-does-not-believe-in-us-government-statistics

[placeholder]

24 minutes ago, nauseus said:

 

I wonder when food and fuel were removed from the CPI calculation?

Core Inflation

https://www.investopedia.com/terms/c/coreinflation.asp#:~:text=Core inflation is the change,prices are much more volatile.

[nauseus]

1 hour ago, placeholder said:

Core Inflation

https://www.investopedia.com/terms/c/coreinflation.asp#:~:text=Core inflation is the change,prices are much more volatile.

 

So the cost of food and fuel are not core considerations when calculating inflation because they are too volatile? I find that to be ridiculous reasoning. 

[placeholder]

5 hours ago, nauseus said:

 

So the cost of food and fuel are not core considerations when calculating inflation because they are too volatile? I find that to be ridiculous reasoning. 

Not ridiculous at all. Otherwise the rate would bounce all over the place. This way the trend is much clearer. And as I guess I'm going to have to point out yet again, the Billion Prices Project bears out the accuracy of the Bureau of Labor Statitistic's work.

[nauseus]

On 3/8/2021 at 9:00 PM, placeholder said:

Not ridiculous at all. Otherwise the rate would bounce all over the place. This way the trend is much clearer. And as I guess I'm going to have to point out yet again, the Billion Prices Project bears out the accuracy of the Bureau of Labor Statitistic's work.

Clear trends do not guarantee a real indication.