U.S. hiring kicked into a higher gear in March as employers added a booming 916,000 jobs amid falling COVID-19 cases, a relaxation of business constraints in many states and a growing number of Americans receiving vaccinations.
The unemployment rate dropped from 6.2% to 6%, the lowest in a year, the Labor department said Friday.
The advances, the most since August, were again driven by substantial gains at restaurants and bars, as well as construction and education.
Economists surveyed by Bloomberg expected 643,000 job gains.
Infections continued to fall through the first half of March, and many states – including Texas, Florida Arizona Louisiana – have lifted all occupancy limits on restaurants and other businesses. That has prompted the outlets to recall more furloughed workers or step up hiring. OpenTable reported a sharp rebound in online restaurant reservations, which are back to pre-pandemic levels in Texas, Goldman Sachs says.
COVID cases have risen recently in a surge tied to spring break, less stringent social distancing requirements and a fast-spreading virus variant. But deaths have continued to trend down, and 29% of Americans have received at least one vaccine shot, according to Pantheon Macroeconomics.
“We are of the view that the U.S. will not see cases rocketing as they did in the UK last fall, when the variant first emerged,” Pantheon Chief Economist Ian Shepherdson wrote in a note to clients.
Meanwhile, after winter storms led to heavy construction job losses in February, milder weather likely boosted job gains last month, Goldman said.
The $900 billion COVID relief package, passed by Congress in December, also likely bolstered hiring, in part by renewing the Paycheck Protection Program, which provides forgivable loans to small businesses, Oxford Economics says.
The number of people working at small businesses increased in March by the most since last June, according to Homebase, which provides employee scheduling software.
Another $1.9 trillion COVID aid bill was likely signed into law too recently – on March 11 – to affect the jobs survey, which was conducted the second week of the month, Capital Economics says. But the measure, which is providing $1,400 stimulus checks to most Americans, is set to significantly juice the economy and job market this year, the research firm says.
In December and January, COVID spikes stalled the jobs recovery from the pandemic-induced downturn. But the unprecedented government assistance, combined with the increasing vaccinations, should lead to 7.5 million job gains this year as unemployment falls to 4.4% by year-end, says economist Lydia Boussour of Oxford Economics.
So far, the U.S. has recovered 13.9 million, or 62%, of the 22.4 million jobs lost last spring. Even if Oxford’s historically massive jobs forecast for this year is realized, it would still leave the country 2.5 million jobs short of pre-pandemic levels.
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Where’s my check? Stimulus checks sent to 130M Americans so far. Delayed payments for some Social Security beneficiaries to roll out.