The labor market has been on a slow and steady path to recovery. But employment in a majority of sectors is still well below where things were before the pandemic struck.
In March, the economy created 431,000 jobs, the Bureau of Labor Statistics reported Friday. That pushed the total number of employees on nonfarm payrolls to 151 million, about 1.6 million workers shy of February 2020. (The Bureau of Labor Statistics says nonfarm payrolls, a measure that excludes certain workers such as farm employees and the unincorporated self-employed, accounts for 80% of employees who contribute to the gross domestic product.)
Some sectors have staged a full recovery since the pandemic. The trade, transportation, and utilities; professional and business services; information; and financial activities sectors have all exceeded prepandemic levels of hiring.
Two sectors of the labor market are shining particularly bright: trade, transportation, and utilities; and professional and business services. Most of the jobs added within the trade, transportation, and utilities industry have been couriers, messengers, as well as warehouse and storage workers. That’s likely due to an uptick in e-commerce throughout the pandemic.
In the professional and business services industry, scientific research and development; management and technical consulting; as well as computer systems design jobs have seen some of the strongest growth. More notably, the number of temporary help workers is 7% higher than before the pandemic, likely due to the heightened economic uncertainty in the past two years and companies’ need to stay nimble.
Hiring in the mining and logging industry is down the most since the start of the pandemic. But workers in the industry have been on the decline since late 2019 and the total number is relatively small. Employment levels in construction; manufacturing; education and health services; and the government are still below prepandemic levels too.
The shortfall in jobs comes, primarily, from the leisure and hospitality industry. The number of workers in that sector is down about 8%—or roughly 1.5 million people—from February 2020. Hotels, in particular, haven’t hired back workers they let go during the pandemic, with 19% fewer people on their payrolls compared with February 2020.
The leisure and hospitality industry’s recovery is being closely watched because it was the pandemic’s hardest-hit sector. The sector was responsible for more than a quarter of the total jobs created in March. With winter ending and the Omicron outbreak winding down, businesses have been staffing up in expectation of a rebound.
Within leisure and hospitality, restaurants and bars made the biggest contribution, adding 61,000 new jobs in March. Hotels created 25,000 new jobs, while amusements, gambling, and recreation added 16,000 new jobs. While a smaller number of people, performing arts and spectator sports, as well as museums and other historical sites, saw strong gains in March too.
Indeed, hiring in the leisure and hospitality industry has been strong over the past year. Across the entire industry, the number of total leisure and hospitality jobs has increased about 16% year over year—the strongest among all sectors.
The number of employees in the mining and logging; information; and professional and business services sectors has all grown more than 5% over the past year, too.
Some of the pandemic’s significant impacts on the labor market have almost entirely faded. The number of workers on temporary layoff, at 787,000 in March, has nearly fallen back to its prepandemic level of 780,000, while the number of permanent job losers—1.4 million—is only slightly above February 2020’s figure of 1.3 million.
Other areas of the labor market are still behind. The labor-force participation rate, at 62.4% in March, remains well below its prepandemic level of 63.4%, contributing to a nationwide shortage of workers in the past year.
Labor economists will continue to watch the labor market as uncertainties like the rising inflation and new Covid-19 variants threaten the broader recovery.
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