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Jump in hiring fuels optimism for U.S. economy

WASHINGTON — U.S. hiring accelerated more quickly than expected last month, evidence that a year after the pandemic took hold, the economy is strengthening as virus cases drop and vaccinations ramp up.

A government report Friday showed that employers added a robust 379,000 jobs in February, driven by a sharp increase at beleaguered restaurants and bars. That suggests Americans are starting to venture out and spend more as progress is made against the coronavirus and states relax business restrictions.

The February gain marked a sharp pickup from the 166,000 jobs that were added in January and the loss of 306,000 in December. Yet it represents just a fraction of the roughly 9.5 million that the economy must regain to get back to where it was before the crisis.

Unemployment fell from 6.3% to 6.2%, the Labor Department said. That is down dramatically from 14.8% last April, just after the virus erupted in the United States. But it’s well above the pre-pandemic rate of 3.5%.

“The recovery really has some legs, some momentum now,” said Odeta Kushi, deputy chief economist at First American Financial Corp.

Stocks see-sawed through the day but ended sharply higher, with the Dow Jones Industrial Average rising 572 points, or about 1.9%, and the S&P 500 moving up nearly 2%.

About 4 million people who have lost their jobs have stopped looking for work and so are not classified as unemployed. If they were included, along with a separate group that was misclassified as working, the unemployment rate would be 9.3%, according to Oxford Economics.

Still, economists are increasingly optimistic that hiring will accelerate in the coming months as Americans seize the opportunity to once again travel, shop, attend sporting events, go to the movies and eat at restaurants.

Households as a whole have accumulated a huge pile of savings as Americans slashed their spending. Much of that is expected to be spent once people feel more comfortable about going out.

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