Nonfarm payrolls rose by 916,000 last month
Job numbers soared in March at the fastest rate since last summer, as the vaccine roll-out continued apace along with robust economic growth.
The US Labor Department reported a surge in new jobs in hospitality and construction on Friday.
During March nonfarm payrolls rose by 916,000 while the unemployment rate fell to 6%.
A Dow Jones survey of economists anticipated a rise of 675,000 along with an unemployment rate of 6%. The figure for March was the highest since the 1.58m added in August 2020.
“It shows that the economy is healing, that those who lost their jobs are coming back into the workforce as the recovery continues and restrictions are lifted,” Quincy Krosby, chief market strategist at Prudential Financial told CNBC. “The only concern here is if we have another wave of Covid that leads to another round of closures.”
While the jobs added were spread across the US economy, they were particularly strong in areas impacted the most by the pandemic.
Nearly 7.9m fewer Americans are counted as employed in February 2021 compared to the year before, and the labour market is down by 3.9m people.
Leisure and hospitality, a sector critical to restoring the jobs market to its former strength, showed the strongest gains for the month with 280,000 new hires. Bars and restaurants added 176,000, while arts, entertainment and recreation contributed 64,000 to the total.
Despite its continued gains, the leisure and hospitality sector remains 3.1m below its total before the pandemic in February 2020.
Economists have outlined what the data could mean for monetary policy in the USA if the results show consistency.
“While the gaudy hiring numbers for March won’t lead to an immediate policy shift, if the economy puts together a string of months like what we’ve seen in March, it will only be a matter of time before expectations on the start of Fed tapering will move up to late 2021, also pulling forward market expectations for the first interest-rate hike into the latter part of 2023,” wrote Joseph Brusuelas, chief economist at RSM.