E Economics

US Job Growth Surpassed Expectations in March; April Should Be Robust

02 April, 2021
us jobs growth March 2021


As I previewed, US job growth beat expectations in March (+660ke). According to the US Bureau of Labor Statistics (BLS), nonfarm payrolls increased by 916k (the largest gain since August 2020) and were revised upward both in February (+468k v +379k prior) and in January (+233k v +49k prior).


us jobs growth March 2021


The details showed broad-based gains across industries in March and confirmed that the improvement was boosted by reopening and weather normalization in several states. As a matter of fact, leisure and hospitality sectors added 280k jobs (supported by a spike of mobility) while local and state government education payrolls increased by about 126k, partly reflecting the return of more in-person learning at schools.


In the meantime, construction employment (more senstitive to climate conditions) rose 110k (the biggest gain since June 2020). Manufacturing payrolls also jumped 53k (the largest spike since September 2020) and almost in line with ADP report, namely +49k.



US jobs growth is likely to remain robust in April. As a reminder, the reference period of the Establishment Survey is the pay period including the 12th of the month. Therefore, it didn’t take into account the second part of the month when high frequency indicators showed a significant improvement of the labor market situation. As a reminder, on March 26, 2021, job postings on Indeedwere 13.5% above February 1, 2020, the pre-pandemic baseline, after adjusting for seasonal variation.” In the details, “That’s a big jump from a week earlier, when postings were 10.7% above the baseline. Postings improved over the past week at a faster rate than during the summer 2020 rebound, when postings rose by an average of 1.6 percentage points per week.”



Furtermore, yesterday, Bloomberg cited a report by the National Federation of Independent Business which showed “Some 42% of firms had job openings last month, and 56% of owners reported adding workers or trying to hire in March. Nearly a quarter of those surveyed are planning to create jobs in the next three months, the second-highest reading since 2018.



Companies should be more inclined to add jobs in April with the ongoing implementation of the $1.9 trillion stimulus signed by Joe Biden in March while the reopening phase is likely to keep supporting leisure and hospitality sectors.


Meanwhile, coupled with other high frequency indicators and first hard data for March such as new vehicle sales, these figures reinforce my view that US GDP can fully recover from Covid-19 by the end of 1Q21 and it could easily top 2021 expectations (recently revised upward to +5.7% according to Bloomberg consensus).