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U.S. Job Market Gains Steam As COVID-19 Infection Rates Ease

STEVE INSKEEP, HOST:

After an anemic start to the year, the U.S. job market experienced a big jump in February. We learned this morning that employers added 379,000 jobs last month. That's pretty good, more than double the hiring of the month before. And it's the best job growth in some months. The unemployment rate dipped to 6.2%. This all comes as Congress is preparing to approve a COVID relief bill to get people through the months ahead.

NPR's Scott Horsley is covering all this. Scott, good morning.

SCOTT HORSLEY, BYLINE: Good morning, Steve.

INSKEEP: Jobs report sounds pretty good.

HORSLEY: Yeah. As you say, after spinning its wheels on icy streets all winter, the recovery has finally found some traction. Bars and restaurants, which have been especially sensitive to each passing wave of the pandemic, added 286,000 jobs last month as COVID restrictions were relaxed around the country. Retailers and manufacturers were also hiring. Sarah House, who's an economist at Wells Fargo, says the job market is coming out of what she calls its winter hibernation, and she thinks we're going to see stronger gains in the months to come.

SARAH HOUSE: Right now, we're seeing - for every case of COVID, we're seeing 30 vaccinations. And when we look at the state of consumers, they have already quite a bit of money to spend. I think they're eager to get out there. And given that it looks like it's going to be a lot safer to do so, that we should see the economy really kick into a higher gear over the next couple months.

HORSLEY: You know, people who've been lucky enough to keep working during the pandemic are sitting on a lot of savings because they haven't been able to travel or go to ballgames as much as usual. If Congress passes the president's relief package, that would mean another $1,400 payment for most Americans. That could fuel a lot of spending in the months to come.

INSKEEP: Granting that some people still need the help, is this an economy that still needs that $1.9 trillion in the rescue package?

HORSLEY: You know, there's still a really big hole to fill in terms of jobs. Even with these February gains, we are 9 1/2 million jobs short of where we were before the pandemic. And economist Daniel Zhao of the job search website Glassdoor says we'd have to add a million jobs every month if we wanted to make up for that this year.

DANIEL ZHAO: We've got some green shoots of the recovery sticking up out of the snow, but there's still a long way to go before the forest grows back.

HORSLEY: Congressional forecasters have said it could be 2024 before we recover all the jobs that were lost during the pandemic. Treasury Secretary Janet Yellen says we can speed that up by passing the $1.9 trillion rescue package. She thinks that could get us back to full employment as early as next year. There are, though, some critics who argue this rescue bill is not necessary, that it's too expensive. Some are also warning it would not only rev the economic engine, but flood the engine and trigger something we haven't had to worry about for a long time, which is inflation.

INSKEEP: Is that fear of inflation part of the reason that the stock market has been a little wobbly lately?

HORSLEY: Inflation is one of the things that is spooking investors and causing a sharp sell-off in the market. Federal Reserve Chairman Jerome Powell, however, thinks those worries are really overblown. He was speaking at a Wall Street Journal event yesterday, and Powell said any runup that we do see in prices this year is likely to be temporary.

(SOUNDBITE OF ARCHIVED RECORDING)

JEROME POWELL: I think it's a constructive thing for people to point out potential risks, but I do think it's more likely that what happens in the next year or so is going to amount to prices moving up, but not staying up.

HORSLEY: Powell says if that turns out to be wrong and we get a surprise jump in prices that's persistent, the central bank does have the tools to deal with that. Now, yesterday, Powell's words did little to calm the stock market, and we did see a pretty big sell-off. But investors seem to be in a better mood this morning. Right now, the Dow is up about 240 points.

INSKEEP: And again, that's responding to a good employment report with unemployment now down to 6.2%.

NPR's Scott Horsley, thanks so much.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.