Employers Report Big Job Gains in March

4/12/2022
 

Unprecedented demand for workers and the scaling back of COVID-19 restrictions across the country have helped power another month of strong job growth in the U.S.

Employers added 431,000 new jobs in March, according to the latest employment report from the U.S. Bureau of Labor Statistics.

The report marked the 11th straight month of job gains above 400,000, and payroll growth averaged a remarkable 562,000 per month in the first quarter of 2022. But overall, employment is still down by 1.6 million from its pre-pandemic level in February 2020.

The unemployment rate fell to 3.6 percent from 3.8 percent in February. Prior to the coronavirus pandemic, the unemployment rate was 3.5 percent.

"The job market is red hot, with high employer demand continually driving healthy job gains and a steady stream of workers back into the labor force," said Daniel Zhao, Glassdoor senior economist. "Concerns about labor shortages seem to be more about employer competition than about people not working."

Job gains in January and February were revised up to 504,000 and 750,000 jobs added, respectively. And employers still added more jobs in March than in all but one month of the decade-long Great Recession recovery during the 2010s, even while citing labor shortages in many sectors.

"If 2022's pace of jobs growth continues, we would reach the pre-pandemic jobs benchmark as early as June," Zhao said.

ZipRecruiter Chief Economist Julia Pollak said that in March, COVID-19 cases in the U.S. fell 80 percent, air travel rose 30 percent and restaurant dining soared back to 2019 levels.

"The increase in mobility and in customers streaming through business doors drove up demand for labor," she said.

"America is back to work, and we are entering a new post-pandemic reality," said Becky Frankiewicz, the president of ManpowerGroup, North America. "Employers are remaining steadfast in their hiring, showing strong gains in hospitality and leisure, professional services, and IT. The tight labor market shows no sign of slowing, and employers need to continue to prioritize offering flexibility, balance and skills development to attract and retain people for today and tomorrow."

 
Industries in Recovery

Some sectors that were hit hardest during the pandemic—such as leisure and hospitality—have continually reported the largest monthly gains but remain below pre-pandemic levels. Other sectors, such as retail, have fully recovered.

Leisure and hospitality employers reported the biggest employment gains in March, with 112,000 new jobs. Over 61,000 of those were in bars and restaurants. Professional and business services added 102,000 jobs, and retail jobs rose by 49,000. Manufacturing added 38,000 jobs in March, and employment in social assistance increased by 25,000.

"Leisure and hospitality and health care and social assistance are two industries with the largest job shortfalls compared to precrisis levels, so continued recovery there will be important to pushing employment back to pre-pandemic levels," Zhao said.

"The public sector continues to lag behind," Pollak added. "The private sector has now recovered 96 percent of the jobs lost at the start of the pandemic, whereas the public sector has only recovered 51 percent. Almost all of the public-sector jobs lost are in K-12 education. It is imperative that our schools fully recover quickly to avoid long-term effects on human capital and opportunity."

 
Unemployment Drops to Near Full Employment

The unemployment rate fell in March to a fresh pandemic low. The number of unemployed people decreased to 6 million. In February 2020, prior to the COVID-19 pandemic, the unemployment rate was 3.5 percent, and the unemployed numbered 5.7 million.

The number of long-term unemployed (those jobless for 27 weeks or more) fell by 274,000 to 1.4 million.

The number of people in the labor force rose by 418,000 and the share of adults who were employed rose to 60.1 percent—the highest since before the pandemic.

"The share of the population with a job increased again in March, with a noticeable uptick for workers ages 25 to 54 years old," said Nick Bunker, director of research at the Indeed Hiring Lab. "This key statistic is growing rapidly and is on track to hit its pre-pandemic level in May. The overall labor force participation rate didn't move much last month, but the rate for prime-age workers increased (to 80.5 percent). While some workers, noticeably those 55 years and older, aren't returning at a rapid pace, the prospects for labor supply are very bright."

The persistent increase in prime-age labor force participation and decline in unemployment is an indicator that workers are looking for jobs and employers are hiring them.

"The labor force has swelled by almost 3 million in just the past six months," Pollak said. "The increase in the number of women in the workforce is particularly encouraging. Women's careers have been most severely disrupted, both due to the industry composition of job losses and due to the pandemic's effects on child care and schooling."

Ron Hetrick, senior economist at Emsi Burning Glass, an employment data analytics firm in Moscow, Idaho, said that while unemployment continues to fall, the number of open jobs remains high.

"We can see a labor market trying to grow and although we see consistently nice gains in jobs, the reality is our labor force is still not back to pre-pandemic levels and our unemployment rate is headed toward record lows," he said. "Who will fill our 11 million job openings?"

The number of people who reported that they had been unable to work due to pandemic-related slowdowns or closures fell sharply from 4.2 million to 2.5 million as COVID-19 cases plummeted, Pollak said. "With 11.3 million job openings, these re-entering job seekers are likely to find success in the coming months, further increasing the ranks of employed workers."

 
Wage Growth Rebounds

People are returning to the workforce in large numbers, and many are getting paid more—though not enough to keep up with inflation.

Average hourly earnings in March increased by 13 cents to $31.73. Over the past 12 months, average hourly earnings have increased by 5.6 percent. The rate of wage gains, however, still lags inflation.

"Wage growth is likely to stay elevated in the coming months as labor demand remains high," Zhao said. "However, with inflation at 7.9 percent, workers are growing increasingly worried about their pay not keeping up with inflation."

Pollak noted that leisure and hospitality (at 11.3 percent) is the only sector in which wage growth is definitively outpacing inflation.

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