By Thomas Cooley and Peter Rupert
The establishment data from the BLS revealed a 379k gain in payroll employment resulting from an increase of 465k from the private sector and an 86k decline in the public sector. Goods employment fell 48k with construction the biggest loser, shedding 61k jobs. The service sector added 513k jobs, likely led by the reopening of leisure and hospitality businesses, up 355k. The data pretty clearly show the effects of the seesawing of pandemic related closures for the leisure and hospitality sector. The damage can also be seen in the unemployment rate for that sector at the onset of the closures, with the unemployment rate reaching nearly 40%.
There was a large decline in average hours of work, falling to 34.6 from 34.9, the highest recorded since 2006. The 34.9 mark was a likely result of the decline in part-time and shorter hours of the workers who lost their jobs during the pandemic.
The household data revealed little change in the civilian labor force, rising 50k with no change in the labor force participation rate, sitting at 61.4. The number employed increased 208k and the number unemployed decreased 158k. The unemployment rate was little changed, falling from 6.32% to 6.22%.
It remains to be seen how quickly labor force participation will spring back as more people get vaccinated and businesses re-open. Many expect there to be significant “scarring” effects of the prolonged separation from employment. At times the fundamentals of the economy seem largely sound, with strong monetary and fiscal support from the government and the Federal Reserve. We will stay tuned.