Today the Bureau of Labor Statistics (BLS) released the employment situation for March 2022. In March, the labor market continued to grow rapidly, adding 431,000 new jobs. In addition, revisions to the previous two months’ reports increased estimated job gains by 95,000 additional jobs. Together, the economy added 562,000 jobs per month over the last three months. This rate of job growth is consistent with a sustained robust recovery in the labor market from the pandemic shutdown. Additionally, the unemployment rate declined to 3.6 percent, near the level before the pandemic.
Even with the rapid employment growth, the economy is still 1.6 million jobs below its level before the pandemic in February 2020. This gap in employment can almost entirely be accounted for by employment in leisure and hospitality, which is 1.5 million jobs below its level in February 2020. As the pandemic is waning, employment in leisure and hospitality has grown rapidly in March, adding 112,000 jobs. I expect continued gains in this sector as travel ramps up over the summer.
Another interesting sectoral trend during the pandemic has been rapid growth in professional and business services and retail trade. These sectors continued their strong growth with an additional 102,000 new jobs in professional and business services and 49,000 new jobs in retail trade in March. They now have 723,000 and 278,000 more jobs than in February 2020, respectively. Growth in these sectors means that many other sectors still have employment below their February 2020 level including manufacturing, social assistance, and health care.
A few other interesting notes from the report:
- Gains in employment in the household survey primarily came from a reduction in unemployed workers rather than from workers entering the labor force. With unemployment at low levels, continued employment gains will likely need to pull more workers into the labor market.
- Wages showed strong growth in March, increasing by 13 cents per hour. Annual gains came in at 5.6%. While strong, inflation continues to run higher than wages, making real pay decline.
- In another sign of the declining influence of the pandemic on the labor market, there was a substantial decline in the fraction of workers who teleworked during March. This fraction declined from 13 percent in February to 10 percent in March.
