February jobs nicely bounce back. But still a lot left to make up

Very surprising jobs report today....on the good side!

Watch now! @joebrusuelas, #RSM's chief economist, joined @YahooFinance today to break down the latest jobs report for the month of February: https://t.co/hp4J6mV93b pic.twitter.com/5gTCfQh247

— Robert McMurry (@mcmurry_robert) March 5, 2021

The February jobs report also included a notable upward revision to payrolls gains in January, but a downward revision to losses in December. January's payroll gain was revised to 166,000, up from the tepid rise of 49,000 previously reported. However, December's payroll losses – the first since April — were revised to 306,000, from the drop of 227,000 reported earlier. Altogether, the U.S. economy remains about 9.5 million payrolls short of its pre-pandemic levels.

But last month, job growth accelerated as declining new COVID-19 cases and broadening vaccine-conferred immunity helped more businesses reopen with greater capacity. The unemployment rate unexpectedly improved to 6.2%, improving significantly from the pandemic-era high of 14.8%, but holding still well above the 50-year-low of 3.5% from February 2020. And the tick lower in the unemployment rate came even as the labor force participation rate held steady at 61.4%....

The vast majority of industries registered net payroll gains in February, including some of the most badly beaten-down pockets of the service economy. Leisure and hospitality payrolls rose by 355,000 in February after declining by more than half a million between December and January, as a resurgence in new COVID-19 cases around the holidays led to renewed social distancing restrictions. Gains in this industry were followed by a wide margin by a rise in temporary help services positions, which rose by nearly 53,000 in February for a third straight monthly gain. Retail trade and education and health services payrolls also each rose by more than 40,000, respectively.

Digging into the actual report, you'll see that the COVID-induced swoons that hit many service sectors in December and January seemed to have cleared some in February, even with bad weather around the time of the monthly survey. However, these areas are still far below where we were a year ago, and aren't much better than they were last Summer.

Worth noting, a big reason behind the downward revisions in December and higher revisions in January traces to the retail sector, which might indicate some new seasonal adjustments and hiring/layoff habits in the COVID World.

The weather did seem to be a factor in the construction sector, which had a loss of 61,000 jobs in Feburary despite the booms in the sector before February. However, manufacturing resumed its job growth, up 21,000 jobs. Both sectors are well off their April lows, but still have a ways to go to get back to the levels of early 2020.

As for the household survey and the unemployment rate, a 0.1% decline to 6.2% continues a positive trend, and it's for the "good reason", as 208,000 more people identified as "employed" in the February survey. However, let's not forget that 6.2% is near the worst of the 2001-2003 stagnation in the jobs market, and that was in the wake of a popping Bubble.

Our stock and housing Bubble hasn't done that yet, so there's that landmine. And the 6.2% number is misleading, as it doesn't account for 4.2 million Americans that have dropped out of the work force in the last year, and if we had the same number of people working but those 4.2 million people back in the work force, our unemployment rate would be 8.6%, not 6.2%.

Still, that unemployment rate is sliding down, and the 379,000 gain in jobs in February is very good, no doubt. We hope it's a sign that we are coming out of this brutal COVID Winter and that people start to get more comfortable with heading out, and get our recovery back on track.

We also need to recognize that there is a LONG way to go.

If you think today's jobs report is "good enough," then know that it this pace (+379,000 jobs), it would take until April 2023 to get back to where we were in February 2020.

— Ronald Klain (@WHCOS) March 5, 2021

This reality is why stimulus needs to happen, and why expanded unemployment benefits and stimulus checks need to be solidifed this week. Because while the news is good on the jobs and vaccine front, the last thing we can afford to do is to back off now. This is where you put the hammer down and make sure the economy doesn't slip backwards like it did in November and December - right before the last stimulus was put in place.