According to the latest economic analysis from the BBVA Research team, February’s unemployment figures confirm that labor market conditions continue to improve as COVID-19 cases slow down, vaccination rates rise and restrictions are lifted in some parts of the U.S.
Nonfarm payrolls rose by 379,000 in February, with strong gains in leisure and hospitality, and smaller increases in temporary help services, healthcare and social assistance, retail trade and manufacturing. The analysis, co-authored by BBVA Chief Economist Nathaniel Karp and Principal Economist Marcial Nava, notes that nonfarm payroll in leisure and hospitality remains 3.5 million below a year ago, accounting for 43 percent of the total gap in private nonfarm payroll.
The report indicates the number of people not in the labor force has remained flat for nearly six months at almost 101 million, still 5.5 million higher than 12 months ago. In addition, the participation rate has remained practically unchanged for the past six months at 61.4 percent. The employment-to-population ratio ticked up 0.1 percentage points to 57.6 percent, only 0.2 percentage points higher than last October’s. Both measures remain significantly below their pre-pandemic rates of 63.3 percent and 61.1 percent.
The team’s analysis concludes that in order to secure a faster recovery, policymakers should continue provisioning ample fiscal and monetary support. They indicate that premature removal of either could derail the post-pandemic recovery and eliminate the opportunity to boost the economy’s long-term potential.
Read the full report here.