U.S. Jobs: Hiring Springs Forward as Omicron Subsides
When I finished last month's job market story, I had a sense of foreboding. That's because the numbers for each month's report are gathered in the first half of the month being reported. That gives the hard-working number crunchers at the U.S. Bureau of Labor Statistics time to organize their reams of data for publication.
At the same time, reports of an Omicron surge were making the news, and at least some labor economists and public health experts worried it might exercise a strong downward pull on job creation and unemployment. Based on this morning's jobs report, I'm pleased to report that those concerns were apparently unfounded.
February was a very good month indeed, with very strong numbers even compared to the previous half-year or so.
What About Them Numbers?
With 678,000 jobs added for February, unemployment also dropped below 4 percent for the first time in a while. It now sits at 3.8 percent, thanks to widespread job growth across many sectors of the economy with leisure and hospitality, health care, construction and professional and business services leading the pack.
Jobs added for both previous months got a boost — December rose by 78,000 jobs to 588,000, while January jumped up by 14,000 to 481,000 — for a trailing quarterly average of slightly more than 582,000 jobs created monthly. That stacks up favorably against 2021's whole-year monthly average of nearly 558,000 (the 24,000 difference is about 4 percent higher).
The gains in employment include most of the sectors that the Bureau tracks for its monthly reports, including the following:
Leisure and hospitality added 179,000 jobs, of which most were in food services and drinking establishments (124,000), with another bump for accommodation (28,000). That said, most of the remaining 2.1 million jobs by which the job market is still missing since February 2020 are in this sector — 1.5 million of them, actually, more than 70 percent of that gap.
Professional and business services added 95,000 jobs, spread across temporary help services (36,000), management of companies and enterprises (12,000), management and technical consulting services (10,000), and scientific research and development services (8,000). This sector's employment is now 596,000 ahead of February 2020 counts, with temporary services (240,000), computer systems design and related services (154,000) and management and technical consulting services (152,000) accounting for most of that growth.
Healthcare grew by 64,000 jobs, including home healthcare (20,000), physicians' offices (15,000), and offices of other health practitioners (12,000). Even so, employment in this sector is still down by 306,000 (1.9 percent) from February 2020 levels.
Construction increased by 60,000 jobs, after staying mostly flat in January. Close to 75 percent of that growth fell to specialty trade contractors, with residential up by 24,000 and non-residential up by 20,000. Employment in this section is down only slightly (-11,000 jobs) from February 2020 numbers.
Transportation and warehousing added 48,000 jobs, and stands 584,000 higher than February 2020 counts. Jobs were added in numerous sub-sectors, including warehousing and storage (11,000), couriers and messengers (9,000), support activities for transportation (9,000), and air transport (7,000). All four areas feature higher employment levels than February 2020, with warehousing and storage up by 420,000 and couriers and messengers up by 240,000 since that benchmark month.
Retail trade grew by 37,000 jobs, with building material and garden supply stores up by 12,000, furniture and home furnishing stores up by 6,000, and gasoline stations up by 5,000. Retail trade employment is up somewhat from February 2020 levels, with 104,000 more people working in the sector now than were employed then.
Manufacturing increased by 36,000 jobs, with 20,000 added in durable goods industries, 16,000 in nondurable goods manufacturing, 11,000 in fabricated metal products, 8,000 in machinery, 4,000 in electrical equipment and appliances, 3,000 in nonmetallic mineral products, 3,000 in furniture and related products, and 3,000 in primary metals manufacturing. Offsetting losses came in motor vehicles and parts (-18,000). Compared to February 2020, manufacturing is still down by 178,000 jobs (1.4 percent).
Financial activities employment grew by 35,000 jobs, of which about half each went to finance and insurance (16,000) and real estate (16,000). Overall employment in this sector is up by 31,000 vis-�-vis February 2020.
Social assistance added 31,000 jobs, with 21,000 in individual and family services. Compared to February 2020, this sector is down by 152 jobs (3.5 percent).
Other services increased by 25,000 jobs, with 10,000 of them in repair and maintenance positions. Vis-�-vis February 2020, other services is down by 317,000 jobs (5.3 percent).
Wholesale trade jobs rose by 18,000, with overall counts 113,000 down (1.9 percent) from February 2020 levels.
Mining added 9,000 jobs in February, where support activities contributed 6,000, and oil and gas extraction 2,000, of that total. Mining is up by 62,000 jobs since it hit its own unique low point back in February 2021 (about a year after the pandemic caused the whole job market to drop like a stone).
Information (our own home sector) and Government were both mostly flat for February.
Notice that we have 5 up sectors, 2 flat sectors, and 7 down sectors overall. Notice further that half of the down sectors are within 5 percent of their February 2020 levels, three of them closer than that. What this tells me is that we're not completely out of the woods yet, but that we can see grandma's house from our current vantage point.
In other words, I am considerably heartened and encouraged by this latest set of numbers.
The Elephant, However Is Still in the Room
With U.S. inflation rates at 7.5 percent — their highest level since 1982 — for February 2022, there's considerable upward pressure on wages in the works. The latest report still shows that this impact is pending rather than actual, but I don't expect that to hold for long.
Energy prices are a big piece of that pie, and the recent fracas in Ukraine has caused oil prices to spike to levels above $100 a barrel in the past week. I have to see inflation as a possible brake on job growth, as workers start to demand (and be paid) higher hourly rates and salaries.
The job market could continue to get tighter, as more jobs chase fewer willing workers, where pay will feature increasingly as an inducement to get more people working. The next few months should prove interesting with COVID continuing to fade, inflation increasing, and the ongoing war in Ukraine casting a scary shadow on the global economy.
Stay tuned, and I'll keep calling on the numbers as they come out.