Industry Insights

JobGet’s February Unemployment Update

By: Holly Monti
Mar 14, 2022 • 5 min read

JobGet’s February Unemployment Update

The February jobs report from the Bureau of Labor Statistics was stronger than expected and comes as the COVID-19 Omicron wave has subsided across most of the country. After the Omicron variant infected millions of Americans and caused widespread disruption to businesses, Americans are once again dining out, shopping, and traveling at more normal levels, despite rising prices. While the job market has been showing increased resilience during waves of the pandemic, the war in Ukraine could cause further price increases in the coming months and impact hiring.

JobGet Unemployment Report Feb - v2-converted (2) copy

Summary

The economy added a robust 678,000 jobs in February, surpassing the 400,000 jobs that were predicted. Job growth for December and January was also revised upward by a collective 92,000 jobs. Alongside healthy job growth, the unemployment rate dropped from 4% to a new pandemic low of 3.8%.

The biggest job gains for February were in the Leisure and Hospitality sector, which was most impacted by pandemic-related layoffs. Leisure and hospitality added 179,000 jobs, accounting for over one-quarter of total job gains. Nearly 70% of jobs added in the sector were in restaurants and bars. Job growth was also widespread across other industries. Professional and Business Services added 95,000 jobs while Healthcare added 64,000 jobs. Hiring in Construction and Transportation, and Warehousing accounted for another 16% of total jobs added.

After months of strong growth, average hourly wages were flat in February. This comes as prices rose by 7.9% on an annual basis, the most in 40 years. Although wages have grown significantly in the past year, it is not enough to keep up with inflation.

While the job market has made great strides in its recovery, the labor force is still missing workers. While many older workers chose to retire during the pandemic—and are not likely to come back—the prime-age labor force participation rate continues to lag pre-pandemic levels as well. Many workers aged 25 to 54 were sidelined during the pandemic due to caregiving responsibilities and health concerns related to the pandemic.

Unemployment Breakdown

The total number of unemployed individuals fell from 6.5 million in January to 6.3 million in February. The number of people on temporary layoffs as well as the number of permanent job losers decreased slightly. The number of long-term unemployed was essentially unchanged since January and currently accounts for 27% of total unemployed. Median unemployment duration fell from 10.1 weeks in January to 9.6 weeks in February, marking the first time it has been under 10 weeks since May 2020.

The overall unemployment rate fell to a new low of the pandemic—3.8%. When broken down by demographic group, the unemployment rates for most groups also fell. However, the unemployment rate for women was unchanged from January, at 3.6%. Men’s unemployment rate dropped to 3.5% from 3.9% in January. The unemployment rates for teens, Whites, Hispanics, Blacks, and Asians were all down from January.

Compared to February 2021, unemployment rates are lower for nearly every occupation category (the exception being healthcare practitioners whose unemployment rate is the same as a year ago). Among service, sales & office, natural resources, construction and maintenance, and transportation and material moving occupations, unemployment rates are 2.2 to 4.8 percentage points lower than rates from February 2021. Except for transportation and material moving occupations, the jobless rates for these occupations all declined from January and are now between 4 and 6.9%.

Industry and Earnings

Once again, the Leisure and Hospitality sector added the most jobs (179,000), accounting for 26% of total job gains. As in prior months, hiring in restaurants and bars made up the majority of job gains (69%) in this sector. This industry has been the most impacted by COVID-related layoffs but has shown resilience during the Omicron wave. The remainder of job gains were spread across a number of other sectors and were especially strong in Professional and Business Services, Healthcare, Construction, and Transportation, and Warehousing.

After months of strong wage growth, average hourly wages barely changed in February. On a year-over-year basis, average hourly earnings are 5.1% higher. The Information sector had the strongest wage growth for the month, at 1.32%. Transportation and Warehousing and Retail Trade also had strong wage growth, increasing by 0.91% and 0.93%, respectively.

While wages barely increased from January, prices rose by 0.8% from the prior month or by 7.9% on an annual basis. This is the largest annual increase in prices since 1982. While wage growth has been strong this year, it is not enough to keep up with rising inflation.

Employment Levels and Labor Force Participation

According to the BLS’s household survey data, from which the unemployment rate is derived, the labor force increased by 304,000 workers, and household employment went up by 548,000 jobs. As a result, the unemployment rate fell, this time to a new low since before the pandemic. However, the workforce is still smaller than pre-pandemic levels. The BLS’s establishment survey shows robust job gains of 678,000.

Currently standing at 82.2%, the prime-age (25 to 54-year-old) labor force participation rate is still nearly a full percentage point below pre-pandemic levels. Prime age labor force participation declined during and after the Great Recession from late 2007 to mid-2009 but had been trending upwards since 2015 until the pandemic hit. As many older workers decided to retire during the pandemic, prime-age workers also left the labor force in large numbers. However, rising wages and school and daycare reopenings have helped bring back many of these workers.

Key Takeaways

The strong February BLS jobs report shows that the U.S. economy added 678,000 jobs as the Omicron wave began to subside, and the unemployment rate hit a new pandemic low of 3.8%.  While the economy is still short 2.1 million jobs from before the pandemic, job levels could recover by summer if strong job growth continues. At the same time, wages were flat as prices continued to rise. The economy has weathered the latest wave of the pandemic well, but the war in Ukraine could impact the economy and job market in the coming months.

JobGet is proud to help hopeful job seekers land great positions on our platform. It is important that both candidates and employers have their needs met as we continue to navigate the pandemic job market.

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