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US employment rebounded last month, helped by an acceleration in vaccination rates and a fresh injection of federal aid.
The Labor Department announced Friday that employers added 916,000 jobs in March, up from 416,000 in February, the highest number since August. The leisure and hospitality sector leads the way with 280,000 new jobs as more Americans visit restaurants and resorts. In construction, jobs rose by 110,000 as the housing market remained strong and activity rebounded after February’s winter storms.
The unemployment rate fell to 6% from 6.2% in February.
The March jobs report is the most optimistic since the pandemic began, said Daniel Zhao, senior career economist at Glassdoor. This is not the largest increase since the pandemic began, but it is the first where the finish line appears to be in sight.
The report was released a year after the pandemic left a hole in the U.S. job market. The U.S. economy lost 1.7 million jobs in March 2020 and more than 20 million in April while the unemployment rate peaked at nearly 15%.
The labor market recovered quickly at first, but progress began to slow as the number of virus cases increased and states imposed new restrictions on the economy. The recovery stalled over the winter, with employers cutting more than 300,000 jobs in December.
Economists say the latest data represents a turning point. Last month was the third month that hiring picked up, and more new jobs are likely to be added in the coming months. The data for March were collected earlier this month, before most states had expanded access to vaccines and before most Americans had received $1,400 checks from the federal government as part of the recent aid package.
The tide is turning, said Michelle Meyer, chief US economist at Bank of America. The report confirms this idea of a significant acceleration of the economy in the spring.
There are still 8.4 million fewer jobs in the United States than before the pandemic. Even if employers had continued to hire at the same pace as in March, it would have taken months to close the gap. More than four million people have been out of work for more than six months, a figure that rose further in March.
And the virus is still a risk. Coronavirus cases are on the rise again in much of the country as states begin to ease restrictions. If this trend turns into another wave of full contagion, it could force some states to withdraw and hinder recovery.
But few economists expect a repeat of winter, when the rebound in activity in Covid 19 pulled the recovery in the other direction. More than a quarter of adults in the United States have received at least one dose of the coronavirus vaccine, and more than two million people are vaccinated every day. This should lead to a further recovery in economic activity.
This time is different, and it’s because of vaccines, says labor economist Julia Pollack on ZipRecruiter. This time it’s for real.
A more comprehensive measure of the unemployment rate that takes into account low-skilled workers and people on the sidelines shows that the real rate was about 9.1 percent in March…Credit…Charles Krupa/Associated Press
The labour market is improving, with unemployment falling steadily. However, other labour market indicators point to a greater degree of weakness than most quoted data suggest.
When the pandemic hit the economy, two major problems began to affect unemployment. Most individuals were classified as employees but were not at work when they should have been classified as laid off. And many people have left the job market altogether. Since the unemployment rate only takes into account those who actively apply for a job, this means that many potential workers are suddenly unemployed.
The unemployment rate fell to 6% in March after peaking at 14.8% in April, but this is an exaggeration of the labour market recovery. A more comprehensive measure that takes into account misclassified workers and those who are on the sidelines – using a method that closely matches the Federal Reserve’s oft-quoted measure – shows that the real unemployment rate was about 9.1% in March.
Of course, this broader measure is down sharply from last April’s peak of nearly 24%. But it shows the extent of the damage that remains to be repaired after the pandemic ravages the economy in 2020.
Fed officials, tasked with bringing the labor market back to maximum employment, are closely monitoring broad unemployment rates and trying to assess how far the labor market is from its full potential. Another point they often make is that total employment in the economy is still well below pre-crisis levels – there were 8.4 million fewer jobs in March than in February 2020.
A lot of people just need to get back to work, and that won’t happen overnight, it will take time, Federal Reserve Chairman Jerome H. Powell said at a news conference last month.
The larger-than-expected increase in employment in March was also surprising in its magnitude.
Forecasters expected the lifting of restrictions in Texas and other states to lead to more hiring in restaurants, hotels and related industries. You were right: The leisure and hospitality sector created 280,000 jobs.
But many new people have also been hired in other areas. Retail and wholesale businesses create more than 20,000 jobs at a time. The manufacturers added 53,000 people. Construction increased by 110,000 jobs as activity picked up after the winter storms that battered the South in February. Public and private education created a total of 190,000 jobs as schools reopened across the country.
Diane Swonk, chief economist at accounting firm Grant Thornton, said the widespread gains show that the recovery is not just due to the resurgence of previously closed businesses. Government support has given Americans the ability to spend money and the confidence that they will spend it.
Companies also seem to be gaining more confidence. Many of the jobs created in January and February were temporary positions, but in March, temporary staffing remained virtually unchanged, suggesting that firms have started filling permanent positions instead.
It is also a sign of optimism that the recovery will continue, Swank said.
Amy Glaser, senior vice president of staffing firm Adecco, said that in recent weeks more of her clients were looking for permanent employees or wanted to convert temporary workers to permanent employees.
Our conversations have really changed, even in the last six weeks, she says. Last year we spent a lot of time with our clients planning for the worst case scenario. Today it’s the other way around: how can we make the most of recovery?
Unemployment rates for blacks, Hispanics, Asians and white males.
Unemployment rates for black, Hispanic, Asian, and white women
While the recovery of the labour market varies across demographic groups, women – who were hit particularly hard at the start of the recession – are experiencing a particularly strong recovery.
Unemployment among women rose sharply at the start of the pandemic, to 16.1 percent in April, and their labor force participation rate fell sharply. Their experiences in the labour market are now moving in both directions: The unemployment rate for women fell to 5.9% in March, lower than that for men, and the percentage of women working or looking for work increased.
Economically, women were hit hard by the pandemic-related closures, both because they were more likely to fill the jobs lost in local closures – from teachers to waitresses in restaurants – and because they took on a greater share of childcare when daycares and schools closed. As state and local economies recover, these trends are reversing.
You open the schools and imagine what happens: women go back to work, says Diane Swank, chief economist at accounting firm Grant Thornton.
However, other demographic groups, which bear much of the impact of the pandemic, lag far behind. Unemployment rates decline by race and ethnic group, but last month the unemployment rate for black workers was 9.6%. This figure is much higher than the 5.4% for white workers and is declining much more slowly.
The Federal Reserve is targeting an uneven recovery and focusing on the path the labor market needs to take to get back to full strength.
The K-shaped recovery in the labor market remains unevenly distributed across racial groups, sectors and wage levels, Fed Governor Lael Brainard said in a recent speech in which she talked about the divergence in economic fortunes between those who are doing well and those who are doing poorly, which looks like a K on a graph. We are still a long way from our big overall goal of maximizing employment.
Ben Casselman contributed to this story.
Saudi oil minister Prince Abdulaziz bin Salman is arguably the most powerful man in the oil sector. linked to credit Ahmed Yosri/Reuters
For months, Saudi Oil Minister Prince Abdulaziz bin Salman, perhaps the most powerful man in the oil sector, has urged his fellow producers to keep a tight rein on production, fearing that extra crude would flood global markets and drive prices down. At the same time, some manufacturers, especially in Russia, are shaking up the corks a bit.
On Thursday, the prince appeared to concede when a group called OPEC Plus – members of the Organization of Petroleum Exporting Countries and allies like Russia – agreed to a modest production increase over the next three months.
Analysts say Prince, who chairs OPEC Plus, appears to have calculated that by appeasing other producers who want to produce more oil, he can maintain control in the long run.
On Thursday, Mr Prince repeated his message of inertia, arguing that the global economic recovery after the pandemic is still fragile, so his willingness to press for an increase was somewhat surprising. But the decision appears to be a recognition of the divergent views within OPEC Plus, and of the fact that OPEC needs to take into account the views of other major producers, such as Russia and the United Arab Emirates, in order to maintain its leadership and not let them get ahead of it.
It’s not my decision, it’s everyone’s decision, he said at a press conference after the OPEC Plus meeting on Thursday.
So far, traders have shown their agreement by driving up prices in a weak market. Brent crude oil rose 3.4 percent Friday to $64.86 a barrel.
Under Thursday’s agreement, OPEC Plus will gradually increase production by 350,000 barrels per day in May and June and by 441,000 barrels per day in July. During the same period, Saudi will also reduce the 1 million barrels per day it voluntarily keeps on the market, bringing the total to about 2.1 million barrels per day in July.
The plan suggests a still cautious and orderly build-up by OPEC Plus, creating tightness in the oil market rather than a surplus, Goldman Sachs analysts wrote Thursday in a note to clients.
OPEC Plus also retains the ability to adjust the results at its monthly meetings. Saudi Arabia, the world’s largest exporter, could also unilaterally decide to restrict supply.
This ability to exit quickly gives Prince confidence that he is exercising a low-risk option, Helima Croft, a strategist at RBC Capital Markets, wrote in a note to clients.
A buyer at Bed, Bath & Beyond last month. With the accelerated spread of the vaccine, economists expect Americans to start spending again. linked to credit Mark Lennihan/Associated Press
Economists think the significant job growth announced Friday is just the beginning. One reason: Americans have a lot of money and are willing to spend it.
U.S. households saved $2.4 trillion in February, $1 trillion more than a year earlier. And that’s before the latest wave of $1,400 checks begins in March.
The main impediment to spending was the pandemic, which prevented people from spending money on restaurants, vacations and concert tickets. But with the accelerated use of vaccines, that could change quickly.
About 35 percent of Americans plan to spend more on travel in the next 12 months than they usually do during the year, according to a survey conducted for The New York Times last month by online research firm SurveyMonkey. About 28% plan to spend more time than usual in restaurants. And overall, nearly 70% of adults plan to spend more than usual in at least one category, at least if their health allows.
They have money in the bank, they’re willing to spend it, but what was holding them back was that there was no comfort level for them, said Jay Bryson, chief economist at Wells Fargo. We reach a critical mass of people who are comfortable going out.
But there are signs that Americans remain cautious. The survey was conducted in mid-March, just as the Treasury Department was preparing to send $1,400 checks to millions of households. More than half of those surveyed who expected a check said they planned to save most of their money or pay off debt. A third said they would use it for immediate needs such as food or rent. Only 10% said they planned to spend most of their money on discretionary purposes.
And while many Americans are looking to spend the money they saved during the pandemic, those hit hardest by the crisis are still working to get back on their feet financially. Of the unemployed, 62% said they plan to use their stimulus check for immediate needs, compared to 29% of workers. Only 3% of the unemployed said they planned to use their welfare checks for discretionary purchases.
Michael Dell, CEO of Dell Technologies, has taken to Twitter to express his company’s objections to a measure that would limit voters’ access to… Michael Nagle/Bloomberg
More and more major corporations are speaking out against Republican efforts to limit voting rights, this time in Texas.
On Thursday, American Airlines and Dell Technologies announced that they oppose state proposals to implement local voting measures such as… B. the extension of early voting.
The return to Texas came just one day after two Georgia companies – Delta Air Lines and Coca-Cola – spoke out against such efforts in the state. Although both companies are already waiting for the Georgia governor to sign the bill, Delta and Coca-Cola have faced Republican backlash for their criticism.
American Airlines and Dell are involved in separate bills currently being considered by the Texas Legislature.
Earlier this morning, the Texas Senate passed legislation that includes provisions to limit access to voting, the carrier said Thursday in a statement, referring to a bill called Senate Bill 7. To clarify the American position: We strongly oppose this and similar bills.
Michael Dell, CEO of Round Rock, the Texas company that bears his name, has revealed on Twitter that his company opposes House Bill 6, a measure that would have prevented local election officials from actively handing out ballots.
Free, fair and equal access to the ballot is the foundation of American democracy, Dell wrote Thursday. These rights – especially for women and people of color – have been hard-won. Governments must ensure that the voice of the citizens is heard. HB6 is doing the opposite and we are against it.
Southwest Airlines, based in Dallas, declined to comment on the specific legislation. In our view, the right to vote is fundamental to our democracy and a right desired by all, the company said in a statement Friday. We believe that every voter should have a fair chance to be heard.
Tesla showroom in Beijing. Recently, the electric car maker has seen growth in China. linked to credit Tingshu Wang/Reuters.
Tesla announced Friday that it more than doubled the number of cars delivered in the first quarter, recovering from the pandemonium that slowed sales in the same period a year ago.
The maker of electric cars said it sold 184,8000 vehicles in the first three months of the year, up from 88,500 last year. It produced 180,338 vehicles, up from 102,672 in the first quarter of 2020.
The company’s global sales figures were released a day after General Motors and Ford Motor announced that their sales figures in the US had increased slightly. Tesla does not lead in sales by region, and much of its recent growth has come from China, where electric cars make up a much larger share of the car market than in the United States.
Tesla was helped by the launch of the Model Y, a larger version of the Model 3 sedan. These two vehicles accounted for nearly all of the company’s deliveries in the first quarter. It announced the delivery of its high-end cars – the Model S luxury sedan and the Model X sports car – in 2020.
Tesla has halted production of the Model S and Model X while the factory in Fremont, California, prepares to produce updated versions of the cars. The company said in a statement that it is in the early stages of ramping up production of the new models, which have significantly higher margins than the Model 3 and Y.
First-quarter sales figures could give a boost to Tesla shares, which have lost more than a quarter of their value since January, when they peaked at around $900. However, the consequences will not be known until next week, as the stock market is closed on Good Friday. Tesla shares fell about 1 percent Thursday to close at $661.75.
Analysts were surprised by the increase in sales. Most expected delivery of about 172,000 vehicles.
The company again defied skeptics and bears, Wedbush analyst Dan Ives said in a report. The sell-off of Tesla and EVs was brutal, but we think it will be over now.
Mannequins at the Brooks Brothers warehouse in Enfield, Conn …. Amr Alfiki/New York Times.
After Brooks Brothers filed for bankruptcy and sold its products last year, it left behind a warehouse in Connecticut full of junk – mannequins, sewing machines and an entire section of Christmas trees.
Since then, the couple who own the warehouse, Chip and Rosanna LaBonte, have been trying to find a way to get rid of everything.
Waste management companies told them it would cost at least $240,000 to clean up the site, which Brooks Brothers had leased until November, Sapna Maheshwari and Vanessa Friedman report for The New York Times. To pay the bill, LaBontes will have to sell his house.
Chip and Rosanna LaBonte, owners of the warehouse where the Brooks brothers stored their belongings before leaving. Linked to credit Amr Alfiki/The New York Times.
Brooks Brothers, founded in 1818 and the oldest continuously operating clothing brand in the United States, rented a warehouse in Enfield in 2011, most recently for about $20,000 a month.
The couple bought the warehouse in 2010. They stated that this was their first foray into commercial real estate, and that they had previously worked on residential projects. They have other tenants and a self-storage space, but they’re frustrated with the clutter and the fact that they can’t use the space for anything else until it’s cleaned up.
This couple’s plight illustrates the far-reaching effects of retailer bankruptcies during the pandemic, which affected everyone from employees to executives. Small sellers and owners often lose out in protracted and byzantine bankruptcy proceedings, especially since they have limited resources to seek legal advice compared to large corporations. And when failing brands are sold, people like LaBontes are usually pushed aside.
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