US sees jobs surge as hope for rebound rises

Hiring surged in the US last month as virus cases dropped, the vaccination campaign gained steam and restaurants and bars brought back workers.

Employers added 379,000 jobs in February, breaking a two-month streak of minimal gains.

The growth was stronger than analysts had expected, but the activity did not significantly dent the jobless rate.

It dipped from 6.3% to 6.2%, reflecting the millions that remain out of work because of the virus.

"This number is a surprise, but it's essentially all about the reopening boost to the jobs market arriving earlier than expected," said Brian Coulton, chief economist at Fitch Ratings.

"The leisure and transport sector accounted for a very high share of the job gains in the private sector, as social distancing restrictions were eased," he added. "Stripping those sectors out, the gains were much more subdued."

In addition to bars and restaurants, retailers and manufacturers were among the employers adding jobs. Construction firms and local governments shed positions, while many sectors were little changed.

"The recovery is gaining momentum now," said Julia Pollak, chief economist at job search site ZipRecruiter. But she said February's gains were "consistent not with a robust rebound, but with the tepid reawakening of the labour market from the Covid winter hibernation".

Roughly 10 million people were unemployed last month - almost double the number a year ago before the virus prompted widespread lockdowns and social distancing, the Labor Department said.

That count did not include the millions more that have stopped looking for work or identified as employed, but are not working because of the pandemic.

Minorities and low-wage workers have been particularly hard hit. While the jobless rate fell for most groups last month, it rose among black workers from 9.2% to 9.9%.

Federal Reserve chairman Jerome Powell said on Thursday he expected hiring to pick up in coming months, as the virus abates and authorities ease restrictions on activity. But he said it was unlikely the US would return to its pre-pandemic employment levels this year,

Despite the gains last month, the number of jobs at hotels and restaurants is down 20% from a year earlier.

"It's a lot of ground we have to cover," Mr Powell said.

Analysts said February's hiring in part reflected the impact of a $900bn (£650bn) relief bill approved at the end of last year.

President Joe Biden is now pushing another $1.9tn package of aid intended to provide support to the jobless and sectors of the economy that are struggling.

Republicans say the amount is unnecessarily large. But Democrats have said they hope to approve the plan by mid-month.