A surprising rise and fall in the unemployment rate in February hampers the long road to a complete recovery of the resonance of the coronavirus, economists say.
The U.S. added 379,000 jobs last month, more than double the value of analysts, and the unemployment rate fell to 6.2 percent, the lowest level since March 2020.
While the February job report showed signs of an accelerated recovery, job growth was just a drop in the bucket compared to the deep damage that has built up within the labor market over the past year. The deceptively low unemployment rate also ignores the millions of Americans forced out of the workforce by COVID-19 and the excessive toll on women of color.
‘The numbers can not be discussed, they are not questionable, and it is not confusing. It’s clear. “Millions of Americans have left the workforce and that is not good for our economy and certainly not good for the continued growth of the economy,” said Michelle Holder, a labor economist at John Jay College in New York.
The increase in employment in February was an unmistakable improvement from the scarce increase of 49,000 in January, and included signs of enterprises ready for a post-pandemic economy. The hard-hit leisure and hospitality sector has added 355,000 jobs, mainly at restaurants and pubs that have long been hampered by coronavirus restrictions.
Nevertheless, the remarkable profits in the sector account for just over a tenth of the 3.5 million jobs in the field claimed by COVID-19 that have yet to be replaced.
The U.S. has declined by about 9.5 million jobs since the start of the pandemic, more than the total decline in employment during the Great Recession, a gap that would take more than two years to fill by the pass of February.
Elise Gould, senior economist at the Economic Policy Institute, calculated that employers should add an additional amount 2.4 million jobs to cover those that would have been achieved if COVID-19 had never derailed the economy.
“Returning to pre-recession levels would not fill the overall job gap,” she wrote.
The unique toll of the pandemic has also made the unemployment rate – the number of people unable to find work divided by the number of people trying to find work or work – almost useless in determining the health of the labor market.
More than 4 million Americans have stopped looking for work as a result of the pandemic, according to the February Employment Report, with many leaving the workforce to look after school-age children, look after sick family members or care for the to get virus. Because the unemployment rate does not include those who are not looking for work, many Americans who would otherwise want to work are not represented in the protagonist.
Federal Reserve Chairman Jerome Powell said in a speech last month (when the unemployment rate was 6.3 percent) that an unemployment rate, including lost workers, would be closer to 10 percent.
As the unemployment rate fell slightly in February, the labor force participation rate was 61.4 percent, 1.9 percentage points lower than a year ago. The employment-to-population ratio – the percentage of working-age adults working – was also unchanged at 57.3%, compared with 3.5 percentage points from February 2020.
“This does not mean that the unemployment rate is wrong, simply that a complete overview of the economy in a pandemic is needed to look at the data in different ways,” he wrote. Cecilia Rouse
Cecilia RouseCBC endorses ‘unequivocally’ Shalanda Young for White House budget chief, The Hill’s Morning Report – Presented by Facebook – Senate Dems faces unit test; Teeth nomination falls on the money: Teeth withdraws nomination as Biden budget chief | Enlightenment bill tests narrow Democratic majority Senate confirms Biden’s choice for trade, more WH economist, Chairman of the White House Council of Economic Advisers, in A Friday analysis.
The unemployment rate is often deflated during prolonged downturns when skilled workers lose confidence in the labor market and stop looking for work. While the same dynamics suppressed the unemployed rate during the Great Recession, the pandemic threw it in an excessive direction with devastating consequences for women and coloreds.
Rouse calculated that although black women made up only 14 percent of the female labor force in February 2020, they have since made up 26 percent of the female labor market pullers. Similarly, Spanish women made up 17 percent of the female workforce a year ago, but 27 percent of the women who are there are gone.
Overall, 2.3 million women and 1.8 million men have stopped looking for work, and economists say it will require more help from the federal government to get them back into the fold.
“Today’s work report, combined with the review of previous months and the pattern of retail sales, highlights how dependent federal aid is on the recovery,” wrote Diane Swonk, chief economist at Grant Thornton, noting the increase in consumer spending in January that followed. has been signed into law on the December Aid Package.
“Many of those targeting low-wage households struggling with unemployment are expected to decline again by mid-March,” she wrote. “We’re still in a very deep hole.”
Biden and the Congress Democrats are trying to pass a $ 1.9 billion bill with an extension of the expanded benefits for unemployed workers before they expire on March 14. lost income for struggling families.
“These gains are going too slowly,” Biden said in the White House on Friday. “We can not go one step forward and two steps back.”
Economists argue that the US is still ready for a strong setback once the country reaches herd immunity – possibly by mid-summer – and can return to some normal life. And although economists acknowledge that there is a light at the end of the tunnel, they say the tunnel could be much longer than it looks now.
‘I do expect [the unemployment rate] to keep going, whether it’s sharp or not, but I’m concerned about the extent to which we can get people back in the US workforce who’s disconnected from it, ”Holder said.