Rents rose in February as U.S. economic activity intensified amid a progressive decline in Covid-19 cases, and vaccines gave hope for further growth.
The Department of Labor reported on Friday that non-farming salaries had risen by 379,000 for the month and that unemployment had fallen to 6.2%. This is compared to the expectations of 210 000 new jobs and the unemployment rate will remain constant as the 6.3% in January.
An alternative measure of unemployment that includes discouraged workers and those who include part-time work for economic reasons was unchanged at 11.1%.
“Today’s work report gives an extremely positive tone as we move to warmer months and accelerate the rate of COVID-19 vaccinations,” said Tony Bedikian, Head of Global Markets at Citizens Bank. “While the labor market still has a lot of ground to make up for, we are in a different place than we were a year ago, and it looks like the economy is ready for a strong setback.”
Almost all of the profits come from the battered leisure and hospitality sector, which saw an increase of 355,000 amid a easing of eating restrictions in some areas. Bars and restaurants found 286,000 jobs while the hotel-related 36,000 were hired, and 33,000 businesses for entertainment, gambling and leisure.
Despite the gains, the industry is still short of 3.5 million from its employment level of a year ago, just before the worst of the pandemic. The increase in rent has lowered the unemployment rate for the sector to 13.5% from 15.9% a month ago; in the subsector accommodation and food services, its unemployment rate fell to 12.7% from 15.3%.
“We see great opportunities in the service sectors,” said Amy Glaser, senior vice president at national staffing firm Adecco. ‘We expect the weather to get warmer [hospitality] sector will begin to explode in the next eight to twelve weeks. ‘
The stock market futures market rose sharply following the report, with the Dow industrials pointing to a 235-point gain on the open. Government bond yields were also higher.
Friday’s report showed that leasing in January was also stronger than initially indicated, with the month’s increase to 166,000 from 49,000. However, the December score was revised lower from a price of 227,000 to a drop of 306,000.
Health care in February rose 46,000, while retail added 41,000. Production also increased by 21,000.
Several sectors suffered losses.
Local and public education opportunities fell by a combined 69,000, while construction declined by 61,000 and mining lost 8,000.
In total, there were 8.5 million fewer Americans who had jobs in February compared to a year ago, a total that had fallen only slightly since January. The size of the workforce increased by 50,000, but labor force participation was 61.4%, which was 1.9 percentage points lower than a year ago.
The average working week also decreased during the month, dropping 0.3 hours to 34.6 hours.
Employment growth slowed towards the end of 2020 amid an increase in business and the renewed strike of the government during the winter. Most economic indicators continued to rise, and GDP growth in the first quarter is expected to meet previous expectations for a flat or slightly better environment.
Federal Reserve officials have been closely monitoring the number of jobs, not only for overall growth in the payroll and a decline in the unemployment rate, but also for the extent of job recovery. The central bank has promised not to raise interest rates until it sees profits spread across income, gender and race, even if that means you have to risk higher inflation.
There was bad news on the front in February: the unemployment rate for blacks rose to 9.9% from 9.2% a month ago. The rate for Hispanics dropped to 8.5% from 8.6%, while the rate for Asians dropped to 5.1% from 6.6%.
Fed Chairman Jerome Powell reiterated his position on Thursday, saying he did not anticipate the US economy meeting central bank targets this year.
Despite the February gains, the labor market still has a long way to go, with millions of workers displaced by the pandemic still looking for work. Recent indicators show that postal appointments are still rising but still lower than needed for a complete recovery.