Earlier this morning, the Bureau of Labor Statistics released the employment situation for February 2021. As predicted, the unemployment rate fell to 6.2 percent; however, the increase in nonfarm payroll employment surprised most experts coming in higher than anticipated as nonfarm payroll employment increased by 397,000 workers. Some commentators have discounted these numbers because most of the jobs gain were in leisure and hospitality (355,000). However, in my view, this increase is a good thing and may be an indicator for a strong job growth in 2021. To see why, if we look back at the job losses last March and April, we see that a majority of the job losses were in Leisure and Hospitality (see Figure 1). As one might guess, the service industries that were people interact face-to-face or where crowds gather were the industries that were the hardest hit. There were more than 8 million jobs lost in leisure and hospitality, nearly 3 million in education and health services, more than 2 million in retail and business services. In all, more than 20 million jobs were lost in these two months. 
Since that time, employment has bounced back, but still total employment is roughly 9.5 million below where we were last February. Figure 2 depicts the total jobs lost in March and April of 2020 along with the change in employment from May 2020 through February 2021.
We can see that employment has increased in many industries, but none have fully recovered. While leisure and hospitality has recovered nearly 60 percent of the lost jobs, the industry is still down near 3.5 million jobs compared to pre-pandemic. It is likely the case that the increase 355,000 increase in jobs in leisure and hospitality is in part a response to state’s opening back up, in part a response to an increase in the number of people vaccinated, and in part due to the declining number of newly reported COVID cases. If we continue more than two million vaccinations a day and if the case number continues to decline, we may see more people willing to venture out to restaurants, movie theatres, museums and galleries, and other live events. This additional spending on these activities will likely boost employment and spending may get an additional “boost in the arm” from the direct cash payments from the American Recovery Act. In short, the February employment numbers seem to indicate that the jobs will come back as the demand comes back. If we continue to make progress on slowing the spread of the disease, we may also see robust jobs recovery in the industries that have been impacted the most.
