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The U.S. jobs rebound picked up steam last month, fueled by the accelerating pace of vaccinations and a new injection of federal aid.
Employers added 916,000 jobs in March, up from 416,000 in February and the most since August, the Labor Department said Friday. The leisure and hospitality sector led the way, adding 280,000 jobs as Americans returned to restaurants and resorts in greater numbers. Construction firms added 110,000 jobs as the housing market stayed strong and activity resumed following winter storms in February.
The unemployment rate fell to 6 percent, down from 6.2 percent in February.
“March’s jobs report is the most optimistic report since the pandemic began,” said Daniel Zhao, senior economist of the career site Glassdoor. “It’s not the largest gain in payrolls since the pandemic began, but it’s the first where it seems like the finish line is in sight.”
The report came one year after the pandemic ripped a hole in the American labor market. The U.S. economy lost 1.7 million jobs in March 2020 and more than 20 million in April, when the unemployment rate peaked at nearly 15 percent.
The job market bounced back quickly at first, but progress began to slow as virus cases surged and states reimposed restrictions on businesses. Over the winter, the recovery stalled out, with employers cutting more than 300,000 jobs in December.
Economists said the latest data marked a turning point. Last month was the third straight month of accelerating hiring, and even bigger gains are likely in the months ahead. The March data was collected early in the month, before most states broadened vaccine access and before most Americans began receiving $1,400 checks from the federal government as part of the most recent relief package.
“The tide is turning,” said Michelle Meyer, chief U.S. economist for Bank of America. The report, she said, “reaffirms this idea that the economy is accelerating meaningfully in the spring.”
The United States still has 8.4 million fewer jobs than it did before the pandemic. Even if employers kept hiring at the pace they did in March, it would take months to fill the gap. More than four million people have been out of work for more than six months, a number that continued rising in March.
And the virus remains a risk. Coronavirus cases are rising again in much of the country as states have begun easing restrictions. If that trend turns into a full-blown new wave of infections, it could force some states to backpedal, impeding the recovery.
But few economists expect a repeat of the winter, when a spike in Covid-19 cases pushed the recovery into reverse. More than a quarter of U.S. adults have received at least one dose of a coronavirus vaccine, and more than two million people a day are being inoculated. That should allow economic activity to continue to rebound.
“This time is different, and that’s because of vaccines,” said Julia Pollak, a labor economist at the job site ZipRecruiter. “It’s real this time.”
Credit…Charles Krupa/Associated Press
The labor market is healing, pushing the unemployment rate steadily lower. But alternative measures of the job market show more weakness remaining than the most frequently cited data might suggest.
When the pandemic hit the economy, two big issues began to mess with the unemployment rate. A big chunk of people were classified as “employed but not at work” when they should have been counted as laid off. And many people dropped out of the labor market altogether. Since the unemployment rate only counts people who are actively applying to jobs, that means a lot of would-be workers were suddenly left out.
The jobless rate fell to 6 percent in March from a high of 14.8 percent in April, but that overstates the labor market’s healing. An expanded measure that adjusts for misclassified workers and those on the sidelines — using a methodology that closely tracks a gauge Federal Reserve officials often reference — shows that the “real” unemployment rate was around 9.1 percent in March.
To be sure, that expanded measure is down sharply from a peak of nearly 24 percent last April. But it shows the extent of the damage yet to be repaired since the pandemic shuttered broad parts of the economy in 2020.
Fed officials, who are tasked with returning the labor market to maximum employment, are keeping a close eye on broad measures of slack as they try to assess how far the job market remains from full strength. Another point they often raise is that total employment in the economy remains well below its prepandemic level — as of March, 8.4 million jobs were missing compared with February 2020.
“It’s just a lot of people who need to get back to work and it’s not going to happen overnight, it’s going to take some time,” Jerome H. Powell, the Federal Reserve chair, said at a news conference last month.
The stronger-than-expected job gains in March were also surprisingly broad-based.
Forecasters had expected the lifting of restrictions in Texas and other states to lead to a surge in hiring at restaurants, hotels and related businesses. They were right: The leisure and hospitality sector added 280,000 jobs.
But hiring was also strong in other industries. Retailers and wholesalers added more than 20,000 jobs apiece. Manufacturers added 53,000. Construction businesses added 110,000 as activity resumed after winter storms hit the South in February. Public and private education added a combined 190,000 jobs as schools reopened across the country.
Diane Swonk, chief economist at the accounting firm Grant Thornton, said the widespread gains showed that the recovery was being driven by more than just the reopening of previously shuttered businesses. Government aid has given Americans money to spend, and the confidence to spend it.
Businesses, too, appear to be growing more confident. Many of the jobs added in January and February were temporary positions, but in March, temporary staffing levels were essentially flat, indicating companies were filling permanent positions instead.
“That’s also a sign of optimism that the rebound we’re seeing will be sustained,” Ms. Swonk said.
Amy Glaser, senior vice president at the staffing firm Adecco, said that in recent weeks, a growing share of her clients had been looking for permanent employees, or converting temporary hires into permanent ones.
“Our conversations have really shifted even over the last six weeks,” she said. “We spent the last year doing a lot of worst-case-scenario planning with our clients, and now the conversation is the opposite — how do we capture the rebound to make the most effective use of it?”
Credit…Ahmed Yosri/Reuters
For months, Saudi Arabia’s oil minister, Prince Abdulaziz bin Salman, arguably the most powerful individual in the oil business, has urged his fellow producers to keep a tight rein on output, fearing additional crude could flood the world’s markets and cause prices to drop. At the same time, some producers, notably Russia, have been chafing to open the spigot a bit more.
On Thursday, the prince seemed to relent, as the group called OPEC Plus — the members of Organization of the Petroleum Exporting Countries and allies like Russia — agreed to modest output increases over the next three months.
Analysts said the prince, who is the chair of OPEC Plus, appeared to be calculating that by appeasing other producers who want to produce more oil, he can remain in control over the longer term.
The prince repeated his go-slow message on Thursday, arguing that the global economic recovery from the pandemic remained fragile, and so his willingness to sign off on an increase came as something of a surprise. But the decision seemed to be an acknowledgment of the diversity of opinions within OPEC Plus, and that he must take the views of other key producers like Russia and the United Arab Emirates into account to maintain leadership and to keep them from going their own way.
“It is not my decision, it is everybody’s decision,” he said at a news conference after Thursday’s OPEC Plus meeting.
So far traders have signaled their approval by pushing up prices in what had been a weak market. On Friday, Brent crude, the international benchmark was up about 3.4 percent to $64.86 a barrel.
Under the deal agreed to on Thursday, OPEC Plus will gradually increase production by 350,000 barrels a day in May and June and 441,000 barrels a day in July. Over the same period, the Saudis will also relax the one million barrels a day they have been voluntarily keeping off the market, bringing the total increase to about 2.1 million barrels a day by July.
The plan “points to a still cautious and orderly ramp-up from OPEC Plus, still allowing for a tight oil market,” rather than a flood, analysts at Goldman Sachs wrote in a note to clients on Thursday.
OPEC Plus also retain the option of adjusting output at monthly meetings. Saudi Arabia, the world’s largest exporter, can also take unilateral decisions to trim supplies.
This ability to quickly backtrack “provides the prince with comfort that he is exercising a fairly low-risk option,” Helima Croft, a strategist at RBC Capital Markets, wrote in a note to clients.
Unemployment rates for Black, Hispanic, Asian and white men
Unemployment rates for Black, Hispanic, Asian and white women
As the labor market heals at different paces for different demographic groups, women — who had been hit especially hard early in the downturn — are staging a particularly strong rebound.
Unemployment for women spiked at the onset of the pandemic, jumping to 16.1 percent in April, and their labor force participation dropped sharply. Now, their labor market experiences are improving along both dimensions: The unemployment rate for women fell to 5.9 percent in March, lower than that for men, and the share of women either working or looking for work nudged higher.
Women had been hit hard economically by pandemic shutdowns both because they work more often in jobs that were lost amid local lockdowns — from teaching to restaurant serving — and because they have shouldered a heavy share of caregiving responsibilities as day care centers and schools closed. Now, as state and local economies reopen, those trends are reversing.
“You open schools, and imagine what happens — women return to the work force,” said Diane Swonk, chief economist for the accounting firm Grant Thornton.
Other demographic groups that had borne much of the pandemic’s fallout remain far behind, however. Unemployment rates are falling across racial and ethnic groups, but the rate for Black workers stood at 9.6 percent last month. That figure is far higher than the 5.4 percent for white workers, and it is falling much more slowly.
The uneven healing has been a focal point for the Federal Reserve, which is focused on how far the job market has to go to get back to full strength.
“The K-shaped labor market recovery remains uneven across racial groups, industries, and wage levels,” Lael Brainard, a Fed governor, said during a recent speech — referring to the divergence in economic fates between those doing fine and those doing poorly, which looks like a “K” when drawn on a graph. “We are far from our broad-based and inclusive maximum-employment goal.”
Ben Casselman contributed reporting.
Credit…Mark Lennihan/Associated Press
Economists think the big job gains reported on Friday are just the beginning. One reason: Americans have plenty of cash, and they are ready to spend it.
U.S. households had $2.4 trillion in savings in February, $1 trillion more than a year earlier. And that was before the latest wave of $1,400 relief checks started going out in March.
The primary factor holding back spending has been the pandemic, which has prevented people from spending on restaurant meals, vacations and concert tickets. But with the vaccine rollout accelerating, that could soon change.
About 35 percent of Americans plan to spend more on travel over the next 12 months than they do in a typical year, according to a survey conducted last month for The New York Times by the online research firm SurveyMonkey. About 28 percent plan to spend more than usual at restaurants. And over all, close to 70 percent of adults plan to spend more than usual in at least one category, at least if the health situation allows.
“They have the money in the bank, they’re ready to spend it, but what was holding them back was not having a comfort about being able to go out,” said Jay Bryson, chief economist for Wells Fargo. “We’re getting into a critical mass of people that are feeling comfortable beginning to go out again.”
But there are signs that Americans remain cautious. The survey was conducted in mid-March, just as the Treasury was preparing to send the $1,400 checks to millions of households. More than half the survey respondents who expected to receive checks said they planned to save most of the money or pay down debt. One-third said they would use it for immediate needs like food or rent. Only 10 percent said they planned to spend most of the money on discretionary items.
And while many Americans may be dreaming up ways to spend the money they saved during the pandemic, those hardest hit by the crisis are still trying to regain their financial footing. Among the unemployed, 62 percent said they planned to use their stimulus check to meet immediate needs, compared with 29 percent of the employed. Only 3 percent of the unemployed said they planned to use their stimulus checks on discretionary purchases.
Credit…Tingshu Wang/Reuters
Tesla said on Friday that it more than doubled the number of cars it delivered in the first quarter, bouncing back after the pandemic slowed sales in the same period a year ago.
The electric carmaker said it sold 184,8000 vehicles in the first three months of the year, up from 88,500 a year ago. It produced 180,338 vehicles, compared with 102,672 in the first quarter of 2020.
The company’s sales numbers, which cover the entire world, come a day after General Motors and Ford Motor reported that their U.S. sales were up modestly. Tesla does not break out its sales by region and a lot of its recent growth has been in China, where electric cars make up a much larger share of the auto market than in the United States.
Tesla was helped by the arrival of the Model Y, a roomier version of its Model 3 sedan. Those two cars accounted for almost all of its deliveries in the first quarter. It reported just 2,020 deliveries of its high-end cars — the Model S luxury sedan and the Model X sport-utility vehicle.
Tesla has halted production of the Model S and Model X while preparing its plant in Fremont, Calif., to build updated versions of the cars. The company said in a statement that it was “in the early stages of ramping production” of the new models, which generate much more profit than the Model 3 and Model Y.
The first-quarter sales numbers could lift Tesla shares, which have lost more than a quarter of their value since January when they hit a high of about $900. The impact won’t be known until next week, however, because the stock market is closed in observance of Good Friday. On Thursday, Tesla’s stock fell about 1 percent, closing at $661.75.
Analysts were surprised by the jump in sales. Most had been expecting deliveries of about 172,000 vehicles.
“The company yet again defied the skeptics and bears,” Dan Ives, a Wedbush analyst, said in a report. “It’s been a brutal sell-off for Tesla and EVs, but we believe that will now be in the rear view mirror.”
Credit…Amr Alfiky/The New York Times
In the fallout of Brooks Brothers’ bankruptcy filing and sale last year, the retailer abandoned a warehouse in Connecticut full of junk — mannequins, sewing machines and a whole section of Christmas trees.
Ever since, the couple that owns the warehouse, Chip and Rosanna LaBonte, has been scrambling to figure out how to get rid of it all.
Junk removal companies have told them it will cost at least $240,000 to clear the space, which Brooks Brothers had rented through November, Sapna Maheshwari and Vanessa Friedman report for The New York Times. In order to pay the bill, the LaBontes are going to have to sell their home.
Credit…Amr Alfiky/The New York Times
Brooks Brothers, which was founded in 1818 and is the oldest continuously operated apparel brand in the United States, began renting the warehouse in Enfield in 2011, most recently at a rate of roughly $20,000 a month.
The couple bought the warehouse in 2010. They said that it was their first foray into commercial real estate and that they worked on residential projects before that. They have other tenants and a self-storage section, but are frustrated about the mess and the fact they can’t use the space for anything else until it is cleared.
The couple’s plight illustrates the far-reaching consequences of retail bankruptcies, which cascaded during the pandemic and affected everyone from factory workers to executives. Smaller vendors and landlords have often been left holding the short end of the stick during lengthy byzantine bankruptcy proceedings, particularly with limits on what they can spend on legal bills compared with larger corporations. And once bankrupt brands are sold, people like the LaBontes are typically left in the dust.
