US set for big jobs surge with more vaccinated and economy picks up

Published Mon, Mar 29, 2021 · 05:50 AM

New York

The US labour market shifted into a higher gear in March as the nation made progress in an effort to put the Covid-19 pandemic in the rear-view mirror.

Economists project a government report will show the largest employment increase in months as vaccinations increase and economic activity, including robust manufacturing, picks up. The median estimate in a Bloomberg survey of economists is for the unemployment rate to fall to 6 per cent as non-farm payrolls rise 643,000.

Policymakers including Federal Reserve chair Jerome Powell and Treasury Secretary Janet Yellen expressed confidence last week in the path of the labour-market rebound.

While the central bank sees unemployment declining to 4.5 per cent by year end - a relatively muted forecast - Mr Powell emphasised the "highly desirable outcome" of workforce participation expanding. Meanwhile, Dr Yellen said supplemental unemployment aid likely wouldn't be necessary later this year.

More than two million Americans are getting vaccinated each day, and President Joe Biden has said states should make every adult eligible for a shot by May 1. At the same time, many states are loosening restrictions on businesses and activity. Higher-frequency data out last week also pointed to a recovering jobs market, as applications for regular unemployment insurance dropped to a pandemic low.

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Other parts of the economy have already reached or even surpassed pre-pandemic levels. After a slew of positive regional manufacturing data points, the Institute for Supply Management's factory index, out on Thursday, will give a look at the state of the sector in March. In February, it surged to a three-year high.

Analysts pointed to economic data that have already started to stir vigorously ahead of relaxed social distancing measures, broad vaccinations and the latest round of fiscal stimulus.

They say from retail activity to industrial production, signs of a robust re-acceleration have been increasingly plentiful over the past few months. Even so, the March jobs report will mark a tipping point, whereby the economy clearly shifts into a much faster pace of growth.

Mr Biden on Wednesday will be presenting his longer-term economic programme, dubbed "Build Back Better", spanning infrastructure and technology investments to a revamp of the tax code to help address widening income inequality. In advance of Mr Biden's speech in Pittsburgh, his aides have prepared some US$3 trillion worth of proposals, according to people familiar with the matter. BLOOMBERG

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