Economists say the surprising increase in employment and decline in the unemployment rate in February have blurred the long road to a full recovery from the coronavirus recession.
The United States added 379,000 jobs last month, more than twice what analysts expected, and the unemployment rate fell to 6.2%, the lowest level since March 2020.
Although the February employment report showed signs of accelerated recovery, compared with the severe disruption in the labor market in the past year, employment growth was only a drop in the bucket. The incredibly low unemployment rate also ignores the millions of Americans who have been forced out of the labor market by COVID-1
“These numbers are worth discussing. They are not suspicious or confusing. It is obvious. Millions of Americans have left the workforce. This is not good for our economy, and it is definitely not conducive to sustained economic growth. .” said Michelle Holder, a labor economist at John Jay College in New York.
Employment growth in February was derived from the insignificant increase of 49,000 in January, an undeniable improvement, including signs that companies are preparing for the economy after the pandemic. The hard-hit leisure and hospitality industries added 355,000 jobs, mainly in restaurants and bars that have long been restricted by the coronavirus.
Even so, the significant growth in this field covers only one-tenth of the 3.5 million jobs in this field that COVID-19 has not replaced.
Since the pandemic began, the United States has still lost about 9.5 million jobs, more than the total employment decline during the Great Depression, and this gap will take more than two years to fill the February rate.
Elise Gould, a senior economist at the Economic Policy Institute, calculated that employers will need to add an extra salary. 2.4 million jobs Covers the gains if COVID-19 never derails the economy.
She wrote: “Returning to pre-recession levels will not fill the total employment gap.”
The unique losses caused by the pandemic also make the unemployment rate (the number of people who cannot find a job divided by the number of people who are employed or trying to find a job) almost useless for measuring the health of the labor market.
According to the February employment report, more than 4 million Americans stopped looking for work due to the pandemic, and many of them withdrew from the labor market to take care of school-age children, care for sick family members or avoid contracting the virus. Since the unemployment rate does not include those who did not find a job, many Americans who wanted to work are not shown in the title.
Federal Reserve Chairman Jerome Powell said in a speech last month that the unemployment rate was 6.3%, and the unemployment rate, including unemployed workers, would be close to 10%.
Due to the slight decline in the unemployment rate in February, the labor force participation rate remained at 61.4%, 1.9 percentage points lower than a year ago. The employment-to-population ratio (that is, the ratio of working-age adults with working age) has also not changed, at 57.3%, a decrease of 3.5 percentage points from February 2020.
“This is not to say that the overall unemployment rate is wrong, it’s just that in a pandemic, to fully understand the economy, you need to look at the data in multiple ways,” Cecilia RouseCecilia Rouse (Cecilia Rouse), CBC (CBC) clearly agreed to Shalanda Young (Shalanda Young) as the head of the White House budget “The Hill’s Morning Report” Tanden nomination falls on money Top: Tanden withdraws the nomination of Biden’s budget chief | The relief bill test narrows the Democratic majority Senate confirms Biden’s business choice, the world’s top economistsMoreChairman of the White House Council of Economic Advisers, Friday analysis.
When qualified workers lose confidence in the labor market and stop looking for work, a prolonged period of downturn tends to reduce the unemployment rate. During the Great Depression, the same situation suppressed the unemployment rate, but this pandemic plunged it into an over-operation, with devastating consequences for women and people of color.
According to Rouse’s calculations, although black women accounted for only 14% of the female labor force by February 2020, black women have accounted for 26% of the female labor force dropouts since then. Similarly, Hispanic women accounted for 17% of the female labor force a year ago, but 27% of women leaving.
In total, 2.3 million women and 1.8 million men have stopped looking for jobs, and economists say they will need more help from the federal government to get them back to work.
Diane Swonk, chief economist at Grant Thornton, wrote: “Today’s employment report, together with revisions to previous months and retail models, highlights the impact of recovery on recovery. Dependence,” he highlighted the situation after the surge in consumer spending in January. The December relief plan became law.
She wrote: “Many programs for low-wage families struggling with unemployment are scheduled to fail again in mid-March.” “We are still in a very deep hole.”
Biden and Congressional Democrats are trying to pass a $1.9 trillion economic relief bill and expand its expanded unemployment benefits before it expires on March 14. Although these unemployment plans will temporarily lapse, the rapid payment of another round of stimulus checks will help ease the unemployment rate. Lost income due to struggling family.
Biden said at the White House on Friday: “These progress are too slow. We cannot take one step forward, nor can we take two steps forward.”
Economists believe that once the United States gains immunity to the cattle herd (perhaps by mid-summer), the United States is still expected to rebound strongly and may return to normal life. Although economists acknowledge that there is a light at the end of the tunnel, they say the tunnel may be longer than it looks.
“I do hope [the unemployment rate] Continue to decline, whether it declines sharply or not, but I am concerned about the extent to which we can return people who have left their jobs to the American workforce,” Holder said.