Labor market progress accelerated in March, but a full recovery remains a long way off
The US labor market recovery accelerated in March 2021 as the economy added 916,000 jobs, but unemployment remains elevated. If the March pace is sustained it will take another 14 months for employment to reach its pre-pandemic trajectory.
The official unemployment rate was 6 percent in March, down from 6.2 percent in February. The realistic unemployment rate, which adjusts the official rate to provide a more historically comparable measurement, fell to 7.8 percent, falling faster than the official rate as labor force participation increased slightly. This uptick in labor force participation was also reflected in a rise in the employment-population ratio. The share of the population that is working climbed by 0.2 percentage point from 57.6 percent to 57.8.
Normal conditions in the labor market are still a long way off. Employment remains 10 million jobs short of where it would have been without the pandemic. Even if the labor market could sustain the March rate of job growth, it would not catch up with the pre-pandemic trend until May 2022.
This PIIE Chart was adapted from Jason Furman and Wilson Powell III blog, “Rapid progress in US labor market but still a long way to go.”