- The stellar February payrolls report has cemented the US jobs recovery as the fastest ever.
- Despite employment dropping the most in history, the hiring rebound is outpacing other recoveries.
- The recovery is also running nearly three times as fast as that after the Great Recession.
The current jobs recovery just might be the most encouraging the US has ever seen.
Data published by the Bureau of Labor Statistics on Friday showed job growth continuing to surpass expectations through February. The economy added 678,000 jobs last month, beating the forecast of 440,000 new payrolls and marking the biggest one-month gain since July.
The unemployment rate fell to 3.8% from 4%, also exceeding projections. With daily COVID infections down to levels not seen since the summer, it’s possible hiring will accelerate further through March.
The jobs rebound was already extraordinarily strong, and the February report cemented it as the most successful in US history. Despite employment falling the most ever at the start of the pandemic, the labor market is on track to recoup its lost payrolls faster than the last three downturns.
The recovery is also outpacing that seen after the Great
. It’s taken just 24 months for the economy to recover to a position of employment just 1.4% below prepandemic. By comparison, it took 67 months for the country to do the same after the financial crisis.
Direct checks, unemployment benefits, and small business assistance kept America afloat
Reasons abound for the labor market’s V-shaped recovery. Congress approved roughly five times as much fiscal stimulus during the pandemic as it did during the Great Recession, with Democrats’ early 2021 package bringing the total price tag to roughly $5 trillion. Direct aid like stimulus checks and boosted unemployment benefits buoyed unemployed workers’ savings, leaving them better equipped to rejoin the workforce once hiring bounced back. Business-focused measures like the Paycheck Protection Program encouraged firms to retain workers until the pandemic subsided.
It’s not just payroll counts that have staged a rapid recovery. The unemployment rate now sits just above the record lows seen before the coronavirus crisis despite hitting a record-high 14.7% in April 2020. Filings for unemployment benefits have also returned to their pre-crisis lows, and weekly deviations are almost to their early 2020 levels. After surging through much of the pandemic, jobless claims are now wonderfully boring.
To be sure, other measures have improved at a much slower pace. High inflation has Americans feeling the worst about the economy in a decade. Labor force participation remains well below pre-pandemic levels as millions of Americans remain jobless and choose not to seek work. That sluggish recovery helped the unemployment rate drop throughout 2021 as workers looking for jobs were able to quickly find openings. But with participation flat through February, the labor shortage is likely to linger well into 2022 and potentially slow the hiring recovery.
Still, it would take a much larger headwind to make the current jobs recovery look like the others in recent history. The V-shaped rebound is alive and well, and as the economy reopens once more, all signs point to continued strength in the months ahead.