U.S. Job Growth Surges Past Estimates; Unemployment Dips to 6.2%

U.S. employers added more jobs than forecast in February and the unemployment rate declined, suggesting the labor market is clawing its way forward again following several disappointing months.

Payrolls increased 379,000 after an upwardly revised 166,000 January increase, according to a Labor Department report Friday. Economists in a Bloomberg survey projected a 200,000 February gain. The unemployment rate dropped to 6.2%.

A decline in Covid-19 cases, along with an easing of business restrictions in some states, is starting to result in more hiring even as millions of Americans remain unemployed. February job growth was propelled by a 355,000 surge in leisure and hospitality employment, an industry hardest-hit by the pandemic and key to a broader recovery in the labor market.

“The core story here is that the re-opening of services will be the dominant factor in the payroll numbers over the next few months,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note. In March, job growth “could easily see a 1 million” gain in employment, unless there’s a renewed surge in infections, he said.

The report adds to recent evidence, including data on manufacturing and retail sales, that the economy is gaining momentum. High-frequency data have also shown additional improvement, including an uptick in restaurant bookings.

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