The U.S. jobs rebound picked up steam last month, fueled by the accelerating pace of vaccinations and a new injection of federal aid.
Employers added 916,000 jobs in March, up from 416,000 in February and the most since August, the Labor Department said Friday. The leisure and hospitality sector led the way, adding 280,000 jobs as Americans returned to restaurants and resorts in greater numbers. Construction firms added 110,000 jobs as the housing market stayed strong and activity resumed following winter storms in February.
The unemployment rate fell to 6 percent, down from 6.2 percent in February.
The report came one year after the pandemic ripped a hole in the American labor market. The U.S. economy lost 1.7 million jobs in March 2020 and more than 20 million in April, when the unemployment rate peaked at nearly 15 percent.
The job market bounced back quickly at first, but progress began to slow as virus cases surged and states reimposed restrictions on businesses. Over the winter, the recovery stalled out, with employers cutting more than 300,000 jobs in December.
Economists said the latest data marked a turning point. Last month was the third straight month of accelerating hiring, and even bigger gains are likely in the months ahead. The March data was collected early in the month, before most states broadened vaccine access and before most Americans began receiving $1,400 checks from the federal government as part of the most recent relief package.
“The tide is turning,” said Michelle Meyer, chief U.S. economist for Bank of America. The report, she said, “reaffirms this idea that the economy is accelerating meaningfully in the spring.”
The United States still has 8.4 million fewer jobs than it did before the pandemic. Even if employers kept hiring at the pace they did in March, it would take months to fill the gap. More than four million people have been out of work for more than six months, a number that continued rising in March.
And the virus remains a risk. Coronavirus cases are rising again in much of the country as states have begun easing restrictions. If that trend turns into a full-blown new wave of infections, it could force some states to backpedal, impeding the recovery.
But few economists expect a repeat of the winter, when a spike in Covid-19 cases pushed the recovery into reverse. More than a quarter of U.S. adults have received at least one dose of a coronavirus vaccine, and more than two million people a day are being inoculated. That should allow economic activity to continue to rebound.
“This time is different, and that’s because of vaccines,” said Julia Pollak, a labor economist at the job site ZipRecruiter. “It’s real this time.”
Economists think the big job gains reported on Friday are just the beginning. One reason: Americans have plenty of cash, and they are ready to spend it.
U.S. households had $2.4 trillion in savings in February, $1 trillion more than a year earlier. And that was before the latest wave of $1,400 relief checks started going out in March.
The primary factor holding back spending has been the pandemic, which has prevented people from spending on restaurant meals, vacations and concert tickets. But with the vaccine rollout accelerating, that could soon change.
About 35 percent of Americans plan to spend more on travel over the next 12 months than they do in a typical year, according to a survey conducted last month for The New York Times by the online research firm SurveyMonkey. About 28 percent plan to spend more than usual at restaurants. And over all, close to 70 percent of adults plan to spend more than usual in at least one category, at least if the health situation allows.
“They have the money in the bank, they’re ready to spend it, but what was holding them back was not having a comfort about being able to go out,” said Jay Bryson, chief economist for Wells Fargo. “We’re getting into a critical mass of people that are feeling comfortable beginning to go out again.”
But there are signs that Americans remain cautious. The survey was conducted in mid-March, just as the Treasury was preparing to send the $1,400 checks to millions of households. More than half the survey respondents who expected to receive checks said they planned to save most of the money or pay down debt. One-third said they would use it for immediate needs like food or rent. Only 10 percent said they planned to spend most of the money on discretionary items.
And while many Americans may be dreaming up ways to spend the money they saved during the pandemic, those hardest hit by the crisis are still trying to regain their financial footing. Among the unemployed, 62 percent said they planned to use their stimulus check to meet immediate needs, compared with 29 percent of the employed. Only 3 percent of the unemployed said they planned to use their stimulus checks on discretionary purchases.
For two weeks, Delta Air Lines and Coca-Cola had been under pressure from activists and Black executives who wanted the companies to publicly oppose a new law in Georgia that makes it harder for people to vote. On Wednesday, six days after the law was passed, both companies stated their “crystal clear” opposition to it.
Now Republicans are mad at the companies for speaking out. Hours after the companies made their statements, Gov. Brian Kemp, a Republican, took aim at Ed Bastian, the chief executive of Delta, accusing him of spreading “the same false attacks being repeated by partisan activists.” And Republicans in the Georgia state legislature floated the idea of increasing taxes on Delta as retribution.
On Thursday, Senator Marco Rubio of Florida posted a video in which he called Delta and Coca-Cola “woke corporate hypocrites.” Senator Roger Wicker of Mississippi said Coca-Cola was “caving to the ‘woke’ left.” And Stephen Miller, an adviser to former President Donald J. Trump, said on Twitter, “Unelected, multinational corporations are now openly attacking sovereign U.S. states & the right of their citizens to secure their own elections. This is a corporate ambush on Democracy.”
It was another illustration of just how fraught it is for big companies to wade in to partisan politics, where any support for the left draws the ire of the right, and vice versa.
Other big Georgia companies have managed to stay on the sidelines. UPS, which is based in Atlanta, also refrained from criticizing the new law before it was passed. On Thursday, the company said it “believes that voting laws and legislation should make it easier, not harder, for Americans to exercise their right to vote.” It made no mention of the law.
In the fallout of Brooks Brothers’ bankruptcy filing and sale last year, the retailer abandoned a warehouse in Connecticut full of junk — mannequins, sewing machines and a whole section of Christmas trees.
Ever since, the couple that owns the warehouse, Chip and Rosanna LaBonte, has been scrambling to figure out how to get rid of it all.
Junk removal companies have told them it will cost at least $240,000 to clear the space, which Brooks Brothers had rented through November, Sapna Maheshwari and Vanessa Friedman report for The New York Times. In order to pay the bill, the LaBontes are going to have to sell their home.
Brooks Brothers, which was founded in 1818 and is the oldest continuously operated apparel brand in the United States, began renting the warehouse in Enfield in 2011, most recently at a rate of roughly $20,000 a month.
The couple bought the warehouse in 2010. They said that it was their first foray into commercial real estate and that they worked on residential projects before that. They have other tenants and a self-storage section, but are frustrated about the mess and the fact they can’t use the space for anything else until it is cleared.
The couple’s plight illustrates the far-reaching consequences of retail bankruptcies, which cascaded during the pandemic and affected everyone from factory workers to executives. Smaller vendors and landlords have often been left holding the short end of the stick during lengthy byzantine bankruptcy proceedings, particularly with limits on what they can spend on legal bills compared with larger corporations. And once bankrupt brands are sold, people like the LaBontes are typically left in the dust.
General Motors reported a modest rise in car sales in North America for the first quarter, but its operations continue to be hampered by a shortage of computer chips.
G.M. said on Thursday that it sold 642,250 cars and light trucks in the first three months of the year, up just 4 percent even though sales a year ago slowed sharply as the coronavirus pandemic took hold.
By contrast, Toyota Motor showed a strong rebound in sales compared with a year ago. The Japanese company reported that sales in North America jumped 22 percent in the first three months of 2021, to 603,066 cars and light trucks. Its March sales were a record high for that month.
Toyota’s big jump helped it outsell Ford Motor, which has also been hit by the semiconductor shortage. Ford’s sales in the first quarter were up just 1 percent, to 521,334. Stellantis — the company formed by the merger of Fiat Chrysler and France’s Peugeot SA — reported its U.S. sales increased 5 percent in the first quarter.
Ford and G.M. both enjoyed substantial increases in sales to individual customers at dealerships while reporting declines in sales to fleet operators like rental car companies and governments.
G.M. and Ford have had to halt or slow production at a handful of plants. G.M. has resorted to making some vehicles without parts containing computer chips with the intention of installing those components before sale when supply improves.
In a statement, G.M. said it hoped its strategy for building cars without some components would help it “quickly meet strong expected customer demand during the year.”
That approach to building cars “underscores the dire nature” of the semiconductor shortage, an analyst at CFRA Research, Garrett Nelson, said in a report. “One of the key questions is how much better the U.S. auto sales recovery can get from here.”
The chip shortage is reflected in G.M.’s unusually low inventory of 334,628 vehicles. That is about 76,000 less than at the end of the fourth quarter and is half the number of vehicles its dealers held in stock a year ago. Ford’s inventory was 56,100 lower than at the end of 2020.
G.M.’s sluggish sales were confined to its Chevrolet brand, whose sales fell 2 percent in the first quarter. That included a 13 percent decline in sales of its full-size Silverado pickup truck, a critical profit maker for the company. The Buick, Cadillac and G.M.C. brands reported strong sales in the quarter.
Toyota also reported a drop in sales of its full-size pickup, the Tundra. But the decline was more than offset by big increases in sales of its RAV4, Highlander and 4Runner sport-utility vehicles and cars from its Lexus luxury brand.
Also on Thursday, Honda Motor reported its first-quarter sales in North America had increased 16 percent, to 347,091 vehicles.