Declining coronavirus cases, $1,400 stimulus checks and relaxed restrictions on business can only mean one thing: Jobs are coming back —and so is the U.S. economy.
The U.S. likely added 600,000-plus new jobs in March and recorded the biggest increase in hiring since early fall, according to economists polled by Dow Jones and The Wall Street Journal. Some even forecast a gain of close to one million jobs.
The March employment report, due Friday, is the headline performer in a busy economic calendar this coming week. A slew of other indicators on consumer confidence, manufacturing and auto sales are also expected to show a mending economy.
“Things keep looking better for the U.S. economy,” said economist Catherine Judge at CIBC Economics. “Job growth and consumer spending are expected to heat up in the coming months as a result.”
The surge in hiring last month was probably quite broad. Restaurants, hotels, retailers, airlines and many other service-oriented companies expanded hours of operation and were allowed to cater to more customers as states loosened coronavirus pandemic rules.
A surge in restaurant reservations tracked by OpenTable, for instance, points to a big increase in hiring, numbering perhaps in the hundreds of thousands. Restaurants have suffered more job losses during the pandemic than any other major industry.
Other industries such as manufacturing and construction could also show sizable gains owing to warmer weather and increasing demand for manufacturing goods and new homes.
The rebound in hiring is primed to accelerate in the spring and summer, assuming the coronavirus pandemic continues to fade as more and more Americans are vaccinated. Some 87 million people have gotten their first dose and almost 50 million are fully vaccinated.
The official jobless rate, meanwhile, is forecast to dip to 6% in March from 6.2%, with some economists predicting it will fall even lower.
Yet the official jobless rate is widely believed to underestimate true unemployment. The Federal Reserve, for example, estimated the real jobless rate was between 9% and 10% in February.
Whatever the case, real unemployment is also likely to shrink rapidly in the next six months. Yet it will take time to recoup some 10 million jobs that existed before the pandemic that are still missing.
Before the coronavirus pandemic struck, the unemployment rate had fallen to a 50-year low of 3.5%.
It may be that all the stimulus causes more inflation or other problems down the line, but for now, the coast is clear for the U.S. economy to take off again.