US jobs surge beats forecasts in signs of labour market recovery

US jobs grew more than expected last month amid falling COVID-19 cases, rising vaccination rates and extra government support putting the labour market recovery back on firmer footing.

Nonfarm payrolls surged by 379,000 jobs in March after rising 166,000 in January, according to a closely watched employment report.

It followed the first fall in eight months in December.

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Economists had forecast February payrolls increasing by 182,000 jobs.

The Labor Department figures came after Federal Reserve chair Jerome Powell gave an upbeat view of the jobs market, but warned a return to full employment this year was “highly unlikely”.

While the unemployment rate fell to 6.2% last month from 6.3% in January, it continued to be understated with people misclassifying themselves as being “employed but absent from work”.

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The labour market has been slow to respond to the drop in daily coronaviruscases and hospitalisations, which helped fuel a boost in consumer spending in January and prompted economists to upgrade their gross domestic product (GDP) growth estimates for the first quarter.

Although millions are unemployed, companies are struggling to find workers, which is helping to hamper jobs growth.

The pandemic is keeping some workers at home, reluctant to accept or return to jobs that could expose them to COVID-19.

It has also disproportionately affected women who have been forced to drop out of work to look after children as many schools remain closed for face-to-face learning.

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According to official data, around 10 million mothers living with their own school-age children were not actively working in January, 1.4 million more than during the same month in 2020.

The job vacancies are mainly in the high-growth industries that have fared well throughout the pandemic, such as information technology, engineering, construction, customer support, manufacturing, and accounting and finance.

Economists believe the labour market will build momentum in the spring and through the summer, with vaccinations increasing daily, even though the rate of decline in COVID-19 infections has flattened recently.

A boost to hiring is also expected from US President Joe Biden’s $1.9trn (£1.4trn) recovery plan, which is under consideration by Congress.

Mark Gibson

Graduates in Northwestern University, Evanston, Illinois 1990. Move to Los Angeles California in 2004. Specialized in Internet journalism.

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