U.S. employers added the most jobs in seven months with improvement across most industries in March, as more vaccinations and fewer business restrictions supercharged the labor market recovery. Nonfarm payrolls increased by 916,000 last month and February employment was revised up to a 468,000 gain, according to a Labor Department report Friday. The median estimate in a Bloomberg survey of economists was for a 660,000 rise. The unemployment rate fell to 6%.
Rising Covid-19 infections had severely restrained the labor market for months, but now more than two million Americans are getting vaccinated daily and economic activity is picking up. This also helps explain why the workforce participation rate edged up in March.
“The end of the pandemic appears to be in sight as vaccine distribution accelerates, and the economic recovery looks like it’s champing at the bit,” Daniel Zhao, senior economist at Glassdoor, said in a note. “We may be looking at a bright summer with monthly gains of over a million jobs, getting us much closer to pre-pandemic employment.”
While stronger sales and daily progress in the fight against the coronavirus will help bring the labor market closer to its pre-pandemic employment levels, a full recovery will take time.
U.S. Treasury yields received a bump higher following the report, with the 10-year rate climbing as high as 1.69%, although it remained within around 2 basis points of its prior day close. U.S. stocks are closed Friday for a holiday.
The payroll figures showed broad-based gains across industries, led by a 280,000 surge in leisure and hospitality. Construction payrolls jumped 110,000 after dipping in February amid severe winter weather. Education employment also climbed as more schools reopened.
Manufacturing employment increased by 53,000 last month, the biggest advance since September.