In the USA, non-farm payrolls, which is expected to increase by 660K according to the Bloomberg terminal, increased by 916K in March, while the unemployment rate decreased to 6%. Progress and recovery seem to have reached good levels, indicating 14 million returning to work during the pandemic period, when 22 million people were unemployed. In this respect, it is positive that the decrease in unemployment, which has increased to double households in the pandemic, also contributed. These developments in the labor market reflect the continued resumption of economic activity curtailed by the coronavirus (COVID-19) epidemic. Employment growth is seen to be led by gains in the entertainment, hospitality, public and private education and construction sectors.
If we look at the sub items; Employment in the leisure and hospitality sectors rose by 280,000 in March as restrictions due to the pandemic were eased in many parts of the country. Also, the increase in employment in both public and private education in March reflects that face-to-face learning and other school-related activities are continuing in many parts of the country. Construction added 110,000 jobs in March, following job losses (-56,000) likely to be related to the previous month's weather. The increase in the participation rate from 61.4% to 61.5% is positive in terms of showing that there is a return to the workforce. Long-term unemployment also declines from 11.1% to 10.7% with a related improvement. The situation in wages is not at a level that will trigger inflation, but we should look at the situation here when the labor market becomes a little more normal.
Data alone will not make sense for the Fed to make interest rate decisions. Additional concern for inflation, at least as wages show, is nowhere to be found. On the other hand, a few recent economic activity and employment data show that the recovery has gone further with the economic packages. It seems that recovery will improve once the impact of the main incentives is felt and firms take advantage of employment benefits.
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