The United States may have added the most new jobs in March in at least six months (Wall Street predicts a gain of nearly 700,000) as the economy accelerated after a winter break. Here’s what to watch for on Friday’s employment report. Market Extra: The Good Friday jobs report will be released on a closed stock market, which has only happened 12 times since 1980
Employment Forecast Business and government likely created about 675,000 jobs in March, according to a survey of economists by Dow Jones and The Wall Street Journal. Such an increase would be the largest since October, just as the coronavirus pandemic was beginning to rise again. By contrast, the United States created 379,000 jobs in February and 166,000 in January. The record spike in cases late last year slowed the economy and even caused the United States to lose jobs in December for the first time since the start of the pandemic. However, after a sharp decline in coronavirus cases in early 2021, governments have eased restrictions on companies. Many companies have started hiring again, especially in restaurants, hotels, airlines, and other industries that were hit the hardest by the pandemic. Some economists predict even bigger job increases in March that could bring the number closer to a million. Read: Consumer Confidence Rises to Pandemic High Unemployment Rate The official unemployment rate is forecast to drop to 6% in March from 6.2% the previous month. If only it were that low. The Federal Reserve and other economists say that the real unemployment rate is closer to 10%. How? The official unemployment rate does not capture the 4 million people who simply stopped looking for work. That is a problem. And many unemployed people surveyed by the government have yet to accurately describe their current state, believing that they are only temporarily out of work rather than permanently unemployed. A little-noticed unemployment rate known as U6 that was also compiled by the government showed the unemployment rate at 11.1% in February. The U6 rate includes people too discouraged to look for work and those who can only find part-time jobs. One-off factors The headline figure for new jobs is likely to be driven by a couple of fleeting factors. For one thing, the weather was unusually bad in February and some people were unable to work. Texas and nearby parts of the South experienced a severe freeze that temporarily shut down much of its economy. Those workers had returned to their jobs in early March. The government’s process for seasonal adjustments could also inflate labor earnings. Last year, the US cut 1.69 million jobs in March as the coronavirus swept across the country. Including that number in seasonal adjustments would make any increases this March look better by comparison. See: A visual look at how an unfair pandemic has reshaped work and home. The government has modified its formula to take into account the pandemic, but there is a lot of guesswork involved. No matter. The evidence is clear that hiring accelerated in March. Payroll processing giant ADP, for example, said private sector companies created 517,000 new jobs last month, while an employment gauge for US manufacturers jumped to a three-year high. have made most of the hires in March. In other words, “leisure and hospitality” companies such as restaurants. Information compiled by OpenTable, a site that tracks restaurant reservations, points to an increase of up to half a million jobs last month. Warmer weather, lax government restrictions and more people eating out encouraged companies to increase staff. While these jobs pay less than the national average, millions of Americans still depend on them for a living and leisure, and hospitality remains a key part of the American economy.