By Seth Gellman
Source: Kevin Lamarque/Reuters
After ascending to the presidency on January 20, many had high expectations for the new president. One of those expectations was to increase job growth and help stimulate the economy after a devastating 2020.
The U.S. economy gained 379,000 jobs in February, making a sharp growth during the Democrat’s first full month in office. The unemployment rate dropped to 6.2%, from 6.3% in January. After the Senate passed Biden’s $1.9 trillion stimulus package on March 7, many are optimistic about the future of the economy. Charlie Ripley, Senior Investment Strategist for Allianz Investment Management, said “The ship is pointed in the right direction.”
The January jobs report was revised to show that 166,000 jobs were added, as opposed to the previous 49,000.
However, many are still worried about how diverse the labor market currently is and how those numbers may not transmit to results immediately. They worry that many are still sidelined from working and that a pattern of slowing employment gains are panicking. One of these observers, Andrew Stettner, senior fellow at the Century Foundation, described the unemployment rate as a “bad descriptor” of labor market conditions.
People aren’t totaled for unemployment if they dropped out of the workforce. The government only tallies who has a job, and who is looking for one. Federal Reserve Chair Jerome Powell said in February that the real unemployment rate is closer to 10%.
Service workers have been hit especially hard by the pandemic, with many losing their jobs and falling behind in employment recovery. Those with a high school diploma but not a college degree lost a higher proportion of their jobs than those with a college degree did.
Dan North, a chief economist, North America at Euler Hermes, points out that women have also been hurt a lot by the pandemic. North argues that many women are staying home because schools. According to North, as children go to school, the number of people in the labor force increases.
While many are optimistic about further economic growth and new jobs, the unemployment rate does not represent the full situation. Many are anxious about a disproportionate number of women and service workers that lost their jobs and are yet to get them back, among others. All eyes will be on the Biden administration and Congress to see if further economic growth and getting more people in the labor force can be achieved.
