Jobs Report and the Monthly Employment Growth Statistics
Why 916,000 Jobs Were Gained in March
The U.S. economy gained 916,000 jobs in March. The job gains reflect the continued impact of the COVID-19 pandemic.
March's gains help make up for the jobs lost since April 2020, when the economy lost a record 20.5 million jobs when businesses shut down to slow the spread of the COVID-19 pandemic.
As of March 2021, there were 3.9 million more unemployed people than in February 2020, the month before the pandemic. The big swings in job losses and job gains in 2020 and 2021 reveal the tremendous impact the pandemic has had on the U.S. economy.
As the chart below shows, job gains have decreased significantly since June 2020 and reversed in December. Gains during the first quarter of 2021 have made a small dent in the job losses.
Where Jobs Were Added
The leisure and hospitality industry added 280,000 jobs in March. This is after losing more than 5.7 million jobs between March 15 and April 18, 2020. The sector typically added 5,000 to 40,000 jobs before the pandemic.
The pandemic further damaged an already weakened retail sector. Store managers have been slashing jobs since March 2017. Online sales have cut into brick-and-mortar store sales. That's been especially true during shelter-in-place.
Professional and business service jobs increased by 66,000, but temporary help services lost 800 jobs. Companies add temporary workers when they aren't sure they will need permanent positions. That's especially true during the early stages of recovery.
Financial activities gained 16,000 jobs after losing 9,000 jobs in February. Banks continued to function during the pandemic but limited the number of people in branch offices. Even before the pandemic, banks had been adding fewer positions as the Fed lowered interest rates. Lower rates reduce profitability to lenders because they must charge less for loans.
The mining industry, which includes the oil industry, gained 20,000 jobs after losing 6,000 in February. Future oil prices are expected to remain subdued due to reduced demand.
Construction gained 110,000 jobs after losing 56,000 in February. Government employment increased by 136,000 jobs.
Here are other sectors with job gains:
- Health care and social assistance added 36,400 jobs in March after adding 50,800 in February.
- The retail industry added 22,500 jobs after adding 28,000 jobs in February.
- Wholesale trade added 23,700 jobs after adding 6,200 jobs in February.
- Education and health services added 101,000 jobs after adding 57,000 in February.
- Manufacturing gained 53,000 jobs after gaining 18,000 jobs in February.
- Durable goods gained 30,000 jobs after gaining 9,000 jobs in February.
Where Jobs Were Lost
The information sector lost 2,000 jobs in March after gaining 3,000 in February. This sector, especially Silicon Valley, is critical to American global competitiveness. The motor vehicle industry also lost 1,000 jobs after losing 3,000 in February.
The U.S. Jobs Report Explained
The monthly jobs report is also called the "Employment Situation Summary" and the "Non-Farm Payroll Report." It's a critical economic indicator because it's the first report of the month. It's also the most comprehensive and credible.
The Bureau of Labor Statistics surveys 160,000 non-farm businesses and agencies on the number of jobs, the wages paid, and the hours worked. The jobs report will tell you which industries are adding jobs, whether American workers are working longer hours, and how fast salaries are increasing.
The jobs report also provides the unemployment rate. To get the number of unemployed individuals, the BLS must undertake a separate survey of households instead of businesses. This household report also includes workers' age, sex, and race/ethnicity. The household survey has a more expansive scope than the establishment survey. It includes the self-employed, unpaid family workers, agricultural workers, and private household workers. They are excluded by the establishment survey.
The household survey is not as accurate as the business establishment report, though. It has a smaller sample size. That's why employment numbers are taken from the establishment survey. So the current unemployment statistics often show a different trend than the jobs report.
Other Jobs Reports
There are two other jobs reports. The monthly ADP National Employment Report is released on the first Wednesday of each month. It's produced by the ADP Research Institute, SM, and Moody’s Analytics. It uses business payroll data to report on the number of jobs added in the private sector. It excludes farming, as does the BLS report. But more importantly, it also excludes government jobs, which are included in the BLS report. For that reason, it's considered incomplete.
The ADP Report is useful because it's released the Wednesday before the BLS report.
The ADP report gives some analysts an earlier view of what might happen in the Friday report. ADP is quick to say it's not intended to be predictive. Like the BLS report, it's revised as more data comes in later in the month. These revised numbers are 96% correlated with the revised BLS jobs report.
The Department of Labor also releases a weekly jobless claims report. This measures the claims for initial unemployment benefits reported by each state every week. It also says how many of the unemployed are still receiving benefits. This report gives an indication of trends, whether there are more or less of the unemployed than the week before.
The main value of this report is that it is weekly and so it gives some idea of trends between the monthly jobs reports. It isn’t accurate when predicting the monthly report because it is volatile.