The U.S. economy is set up for a stronger recovery this spring after a February surge in hiring at restaurants and other hospitality businesses created the best monthly job growth since last fall.
Employers added 379,000 jobs in February and January gains were revised higher to 166,000 jobs, the Labor Department said Friday. The pickup comes after employers cut jobs late last year.
The unemployment rate, determined by a separate survey, ticked down to 6.2% last month. The rate is well below a near 15% pandemic peak in April 2020, but remains above 2019’s 50-year lows. Overall, the U.S. has 9.5 million fewer jobs than a year earlier, just before the coronavirus pandemic took hold in much of the country.
U.S. stocks gained on Friday afternoon in a wild trading session that followed the employment report’s release, while government-bond yields extend a recent surge.
In February, most of the job gains occurred in the leisure and hospitality sector, which includes restaurants, adding 355,000 jobs. There were smaller increases in temporary help services, manufacturing and healthcare.
The gains reflect reduced business restrictions, more people receiving vaccines, a lower level of Covid-19 infections and a recent round of government aid to households and businesses, which boosted consumer spending early this year.
“Some consumers are dipping their toes back in,” said
Nela Richardson,
a Ph.D. economist at human-resources software firm
Automatic Data Processing Inc.
In addition to restaurants, there were job gains at hotels, stores and in personal services, such as salons. “[Consumers] maybe not willing to fly off on an airplane, but appear more willing to dine in at a neighborhood restaurant.”
The job gains reinforce other signs of economic momentum. Household income growth surged in January and consumers boosted spending, according to separate Commerce Department reports, reflecting government-stimulus payments to individuals and enhanced unemployment benefits at the start of the year. Demand for manufactured goods is also rising and home sales are trending at 14-year highs.
Dr. Richardson said she expects hiring to accelerate further in the coming months, to more than a half-million jobs a month. “We’ll see a burst in hiring before things start to taper off again,” she said.
Mama Fox Bar & Restaurant in Brooklyn, N.Y., has hired five employees in recent weeks after New York City allowed restaurants to resume indoor dining at 25% capacity and milder weather led to an increase in outdoor dining, owner Samantha DiStefano said.
That marked a turnaround from January when the staff was reduced to a few workers amid operating…