The March jobs report shows economy roaring back from pandemic doldrums
A spike in hiring for residential specialty trade contractors in March helped buoy an industry that has seen sluggish home sales amid rising interest rates.
The Bureau of Labor Statistics has released its jobs report for March, and First American Financial Corporation’s deputy chief economist Odeta Kushi (pictured) believes it represented good news for the sector.
“There was a big increase in hiring for residential specialty trade contractors this month (+10,200), while residential building dipped slightly,” she told Mortgage Professional America. “Overall, a net gain of 7,600 jobs for residential construction, which is good news for this labor-intensive industry and for the prospect of more housing supply.”
Overall, the report showed a labor market that is coming back strong, adding 431,000 jobs in March. The jobs increase brought the unemployment rate to a new low amid the pandemic, of 3.6%. The unemployment rate stood at 3.5% before the pandemic.
Despite the solid numbers for March, Kushi noted they were below expectation – but with signs of promise overall.
“Total non-farm payroll employment increased by 431,000 in March, slightly below consensus expectations,” the economist told MPA. “Approximately 93% of the jobs lost in the pandemic have been regained. If monthly gains continue at the March pace, we could return to the pre-COVID employment peak by July 2022.”
Read more: Fed still likely to raise interest rates despite strong February jobs report
The report shows the economy is now a mere 1.6 million jobs short of where it was in February 2020 prior to the COVID-19 onslaught. That’s just 1% short of the February 2020 level. What’s more, various labor market measures are close to pre-pandemic levels, according to the report. The number of unemployed people, for example, fell by six million in March.
“Prime-age labor force participation rate moved up to 82.5% from 82.2%. Still below pre-pandemic, but great to see some movement upward,” Kushi said. “That’s a promising sign for more labor supply in March.”
Kushi was also impressed with people’s earnings, as reported for March: “Average hourly earnings of production and non-supervisory employees in construction reached its highest year-over-year growth rate since 1982, at 6.2% in March,” she said. “The construction industry faces a shortage of skilled workers, and one way to attract and retain employees is to pay more.”
Read next: Odeta Kushi on what needs to happen about house price growth
While the numbers may have fallen short of expectations, Bureau of Labor Statistics economists noted they represented the 15th straight month of strong job gains.
Other highlights from the report:
- Women made up the majority of new employees in March, while the number of unemployed women and those not in the labor force declined.
- The number of people working remotely declined as the pandemic continues to wane, dropping to 10% in March from 13% the prior month.
- Wages increased as employers looked to lure workers as job openings abound. Average hourly earnings rose by 13 cents to $31.73 in March, pushing the average increase over the past year to 5.6%.
- More people are seeking jobs as the pandemic ebbs, according to the report. Nearly 900,000 people were prevented from seeking work because of the pandemic in March, down from 1.2 million in February, according to the report.
- The leisure and hospitality industry, which includes restaurants and bars, was the hardest-hit sector at the height of the pandemic. The segment in March led job gains, with 112,000. Professional and business services gained 102,000; retail added 49,000; manufacturing gained 38,000; and construction added 19,000.
