Expectations headed into this morning showed projections of about 210,000 new jobs added in the United States in January. As it turns out, according to the new report from the Bureau of Labor Statistics, those projections underestimated recent progress in the job market.
Hiring surged in February as the U.S. economic activity picked up amid a progressive drop in Covid-19 cases and vaccines provided hope of more growth ahead. The Labor Department on Friday reported that nonfarm payrolls jumped by 379,000 for the month and the unemployment rate fell to 6.2%.
At face value, monthly job growth of 379,000 obviously looks great, and under normal circumstances, data like this would be worth celebrating.
But nothing about our current circumstances is normal. Despite this encouraging report, the domestic economy is still 9.45 million jobs short of where we were a year ago at this time, before the effects of the pandemic fully took root in the United States.
As we discussed in January, the trajectory in recent months highlights the broader problem: In March and April of last year, the economy shed over 22 million jobs. The United States spent the next several months adding, but that only brought us back halfway to where we were.
Just as importantly, the monthly totals gradually decreased in the latter half of 2020. In other words, even as the economy added jobs, July's totals were worse than June's, August's totals were worse than July's, September's totals were worse than August's, and so on.
Making matters considerably worse, in December, the economy stopped adding jobs altogether. Indeed, according to the revised totals, the United States shed over 300,000 jobs in the final month of 2020.
But we still have a long way to go. If we maintain the pace of job creation seen in February, it will take two years to get back to pre-COVID levels -- which is why the pace needs to be much faster. With a robust COVID relief package moving forward in the Senate, that's far more likely.
Above you'll find the chart I run every month, showing monthly changes in total jobs since the start of the Great Recession. The image makes a distinction: red columns point to monthly changes under the Bush and Trump administrations, while blue columns point to monthly job changes under the Obama and Biden administrations.