Total nonfarm payroll employment rose by 379,000 in February, while the unemployment rate was little changed at 6.2%, according to the U.S. Bureau of Labor Statistics’ monthly employment report. Most job gains occurred in leisure and hospitality, followed by temporary help services, health care and social assistance, retail trade, and manufacturing.
The number of unemployed persons stands at 10 million—lower than its peak in April 2020, but well above the 5.7 million in February 2020. The number of persons on temporary layoff fell by 517,000 in February, down to 2.2 million—1.5 million higher than one year ago, but far lower than the high of 18 million in April 2020.
The number of permanent job losers remained relatively unchanged month to month at 3.5 million, up 2.2 million from one year earlier. The number of long-term unemployed showed little change at 4.1 million, up 3 million from February 2020. Labor force participation remained at 61.4%.
“The economy has only regained approximately 58% of the jobs lost at the start of the pandemic, but the recovery has momentum now,” says Odeta Kushi, deputy chief economist at First American. “Successful vaccine dissemination may help the hardest-hit sectors recover, providing a boost to the labor market, with faster growth skewed to the services sector.”
In February, 22.7% of employed persons reported teleworking because of the COVID-19 pandemic, and 13.3 million people reported that they had been unable to work because their employer had closed or lost business due to the pandemic. Among that number, 10.5% reported they had received at least some pay for hours not worked, down from 12.7% in January.
Leisure and hospitality employment rose by 355,000, driven in part by easing restrictions in some parts of the country. Employment in this sector is still down by 3.5 million, or 20.4%. “Job gains were concentrated in the leisure and hospitality sector (+355,000) and, in particular, the bar and restaurant sub-sector (+286,000), a strong signal of the service sector reopening,” says Doug Duncan, chief economist at Fannie Mae. “As this sector is heavily dependent on people gathering in close proximity, we believe the efficient distribution of effective COVID-19 vaccines will be crucial to support the ongoing recovery. On the downside, the construction sector lost 61,000 jobs in February, likely impacted by recent severe winter weather, which would hamper hiring.”
While construction employment fell by 61,000, these losses are concentrated in nonresidential sectors, including nonresidential specialty trade contractors (-37,000) and heavy and civil engineering construction (-21,000). Industry employment is still down 308,000 from its level one year earlier.
“Employment in residential construction continued its 10-month rising trend—now 2.2% above February 2020,” Kushi says. “Good news for an industry in desperate need of more supply. The construction industry remains a labor-intensive industry—you need more construction workers to build more homes.”
