Hiring in the United States resumed in February as Covid cases declined
The US economy created 379,000 jobs in February, indicating a strong rebound in the US labor market amid rapidly declining coronavirus cases across the country and resumption of liquidation of US Treasuries.
Employment growth last month more than doubled from its pace in January, when the economy created 166,000 jobs after cutting 306,000 jobs during the winter pandemic push in December.
The leisure and hospitality sector saw an increase of 355,000 jobs, the bulk of last month’s gains
However, it still leaves the world’s largest economy 9.5 million jobs below its pre-pandemic levels. The unemployment rate in the United States fell to 6.2 percent.
A massive sell-off of US government debt accelerated after the jobs report was released on Friday. The 10-year Treasury bill yield soared 0.05 percentage points at one point to 1.62% – its highest since February 2020 – extending losses that accumulated on Thursday after the President of the Reserve Federal government Jay Powell has not allayed concerns about rising yields lately. weeks.
T-bills came under extreme pressure last week, with investors positioned for higher inflation and the possibility for the Fed to tighten its super-easy monetary policy sooner than expected.
The S&P 500 opened 1 percent more, while the US dollar index edged up 0.2 percent.
Many economists have recently improved their growth outlook in 2021 on expectations of a rapid vaccination rollout and President Joe Biden’s implementation $ 1.9 billion stimulus plan.
But Powell triggered the liquidation of U.S. Treasuries Thursday after saying the U.S. central bank is unlikely to act in response to a temporary rise in inflation or a rise in debt yields caused by the economic improvement. .
“The larger message that [Powell] given is one that should ultimately support the bond market, as he argued that it will take some time for the economy to fully recover, ”said Stephen Stanley, chief economist at Amherst Pierpont.
Stanley added that Powell was “adamant” that inflation would stay under control and stressed the Fed’s patience before adjusting its policy.
“The question is whether the Fed retains any credibility during this time,” Stanley said. “It’s been a while since we’ve seen the market lose faith in the Fed, but it looks like we’re taking a smell of it.”
The job market is one of the weakest spots in the US recovery, after millions of service sector jobs disappeared during the pandemic.
After the heavy blow suffered in March and April last year, Americans returned to work in droves over the summer, but progress stalled in the winter months.
Job creation in February was not enough to offset the 523,000 net layoffs over the previous two months.
While the manufacturing sector created 21,000 jobs, construction lost 61,000 jobs due to the unusually cold weather that hit many parts of the country. The government also lost 86,000 jobs in the past month.
But economists said the overall numbers indicated further improvements in the coming months.
“You get the first advantage of some states that are slacking off a bit,” Stanley said. “February is really just a down payment on what should be much bigger gains over the next few quarters.”