U.S. employers hired far more workers than expected in March 2021 as the accelerating pace of Covid-19 vaccinations continued to fuel hiring in the leisure and hospitality and at state and local governments.
The construction industry also posted a strong March as the housing market stayed healthy and building activity resumed following the winter months.
The Labor Department reported Friday that total nonfarm payroll employment rose by 916,000 last month, the best monthly print since August. The unemployment rate continued its steady decline to 6%.
The increase in total payroll employment was better than the net gain of 675,000 that economists surveyed by Dow Jones had forecast. Though regular trading in the U.S. stock market will be closed on Friday due to the Good Friday holiday, Dow futures were up more than 150 points just before 9 a.m. ET.
CNBC studied the net changes by industry for March jobs based on data contained in the employment report.
Leisure and hospitality, which one year ago saw some of the worst of the pandemic’s layoffs, had the largest net gain by far for the month at 280,000 jobs added. Nearly two-thirds of the increase was in food services and drinking places (up 176,000), but arts, entertainment and recreation added 64,000.
Though the strong hiring numbers for the sector in March follow an even-larger net gain of 384,000 in February, employment in leisure and hospitality is down by 3.1 million, or 18.5%, since February 2020.
The food services subindustry, which includes waiters, cooks and bartenders, saw some of the most severe declines over the last 12 months as Covid-19 and efforts to contain its spread forced eateries to close starting last spring. The U.S. economy lost 1.7 million jobs in March 2020 and more than 20 million in April.
Still, economists said the most recent data was an inflection point for the U.S. jobs market and a sign of more robust employment figures to come after the virus whacked the American labor market one year ago.
“Just as important as the big jobs number are the types of jobs added. While leisure and hospitality, the hardest-hit sectors, gained the most, other gains show the economy is broadly under repair,” Robert Frick, corporate economist at Navy Federal Credit Union, said in an email.
Government hiring proved a bright spot in March with a gain of 136,000 as the vaccine rollout and economic reopening brought teachers back into the classroom. Employment rose by 76,000 in local government education, by 50,000 in state government education, and by 64,000 in private education.
“Good hiring in education shows teachers are returning to work as schools reopen, and gains in manufacturing finally reflect the resurgence of that sector,” added Frick.
Construction employment, boosted by an uptick in building projects in the springtime months, added 110,000 after falling 56,000 in February. Growth in the industry was widespread in March, with gains of 65,000 in specialty trade contractors, 27,000 in heavy and civil engineering construction, and 18,000 in construction of buildings.
Elsewhere, manufacturing added 53,000 jobs and retail posted a gain of 22,500. Health care and social assistance notched 36,400 and professional and business services rose 66,000.
“Today’s labor market report emphasizes the strong recovery that is beginning to take shape in the service sector of the economy,” wrote Charlie Ripley, vice president of portfolio management for Allianz Investment Management. “The payroll data suggests that the labor market has begun to turn around, but we still have a long way to go before substantial progress is made and the labor market fully recovers.”
— CNBC’s Nate Rattner contributed reporting.
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