Rents rose in February as U.S. economic activity increased with cases of gradual declining Covid-19s and the rollout of vaccines hoping for more 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 is stable from the 6.3% in January.
An alternative measure of unemployment involving discouraged workers and those involving 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 pace 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, we are in a different place than we were a year ago, and it looks like the economy is ready for a strong setback.”
Nearly all of the profits come from the battered leisure and hospitality sector, which saw an increase of 355,000 amid a easing of restaurant 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 rents brought the unemployment rate for the sector down 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 Adecco National Personnel Office. ‘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 loss of 227,000 to a drop of 306,000.
Healthcare work in February rose by 46,000, while retail added 41,000. Production also showed an increase of 21,000.
Several sectors suffered losses.
Local and public education jobs fell by a combined 69,000, while construction declined by 61,000 and mining lost 8,000.
In total, there were another 8.5 million Americans employed 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 rose to 61.4%, 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 at the end of 2020 amid an increase in business and the renewed strike by the government during the winter. Yet most economic indicators continued to rise, and GDP growth in the first quarter is expected to meet previous expectations for a flat or only 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 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 on Thursday reiterated the central bank’s position, saying he did not anticipate that the US economy would meet the central bank’s targets this year.
Despite February’s overall increase in jobs, the labor market can still heal for a long time, with millions of workers displaced by the pandemic still looking for work. Recent indicators show that the postal appointment is still increasing, but at a rate much lower than is necessary for a complete recovery.