Rounding the Corner

The Green Chutes of Recovery Began to Appear in February

Robert Spendlove and Drew Maggelet Mar 5, 2021

As vaccines pick up and case counts drop, job gains have begun to pick up. The U.S. gained 379,000 jobs last month, with leisure and hospitality, retail trade, and manufacturing leading the gains. This month’s job growth beat all expectations and indicates an economy well on its way to a full recovery. 

Top Takeaways from the Report

Green Chutes of Recovery Beginning to Grow

After several months of concerning jobs numbers, February’s jobs growth represented a return to higher growth rates necessary for a quick recovery. Jobs growth beat expectations across the board, especially in the private sector where the Econoday consensus estimate was beaten by 400,000.

In a pre-pandemic environment, February’s 379,000 jobs added would have been the 2nd largest monthly jobs increase in the last decade. In addition to February’s pleasantly surprising number, the January number was revised up significantly, rising from an initial 49,000 gain to 166,000. When combined with the February data, it’s hard not to see the beginnings of a sustained period of strong jobs growth as pandemic fades.

Going Out Going Up

The big driver of February jobs growth was without a doubt the leisure and hospitality industry. The 355,000 jobs added represent the most jobs the industry has added month to month since September. Most of the growth in the sector came from restaurants and bars, which added 285,900 jobs. All other subsectors, except for sports and performing arts, also added jobs month to month. Leisure and hospitality has been the hardest hit industry of the pandemic and to see the sector lead monthly job growth before many restrictions were relaxed is a great sign of things to come, especially since many COVID19-related restrictions were still in place in February when the research was conducted.

There’s still a ways to go to regain all the jobs lost in the industry, but if February’s growth is any indication, the leisure and hospitality recovery is off to a really good start.

We’re Just Getting Started

Jobs report numbers for this month were collected early in the month, not too far removed from the high cases numbers, large number of deaths and low vaccination rates of January. Since then, the COVID-19 situation has improved dramatically with daily vaccinations reaching new highs and daily case counts declining by almost 75% since early January. If the economy was able to expand at a reasonable rate given the headwinds in February, we should see some very healthy growth as the pandemic crisis and related restrictions come to a close.

Growth by Industry

February saw strong growth in the private sector with private payrolls adding 435,000 jobs. The public sector did not add jobs, losing 86,000 month to month.

As stated previously, Leisure and Hospitality led all growth sectors in February, adding 355,000 jobs. Accommodation and food services (+321,000) led growth in the sector thanks to particularly strong growth among food services and drinking places (+285,900). The arts, entertainment, and recreation subsector (+33,000) was also positive month to month.

The professional and business services sector experienced decent job growth again in February, gaining 63,000 jobs thanks to an increase in temporary help services jobs (+52,700). The large number of temporary hires may indicate employers are hesitant to bring on new employees due to uncertain economic conditions.  Health care and social assistance (+45,600); retail trade (+41,100) and manufacturing (+21,000) all saw significant job growth in February as well. The other services sector (+10,000) also saw minor gains.

The public sector once again struggled in February, losing 86,000 jobs. The lion’s share of the job losses came from state government education (-32,000) and local government education (36,600) as both these sectors continue to struggle with school closures. However, the Bureau of Labor Statistics has admitted it has had a hard time measuring these education sectors so it is possible that these declines are due to survey methods and not actual job losses.

Construction also contracted in January, losing 61,000 jobs. According to the Bureau of Labor Statistics, these losses were likely due to severe winter weather in parts of the country that held back hiring and employment in the sector.

Natural resources and mining (-8,000); financial activities (-5,000) and information (-3,000) all saw minor job losses.

The Bottom Line

Springing to Life

There were some things that were less than ideal about the February jobs report. The labor force participation rate remains historically low, African American unemployment increased, and those unemployed for 6 months or longer increased by 125,000. But it’s important to remember that this occurred in an environment with far more headwinds than we see now.

The fact that the economy added jobs at a good rate in spite of those headwinds and before another round of stimulus is a great sign that as the economy opens back up, more people get vaccinated and case counts decline; the U.S. job market will recover at a reasonably quick rate going forward. Given the optimism seen throughout the economy in recent weeks, it is hard to see the U.S. not having a major expansion in jobs as the economy opens back up over the spring and summer months.


Recently, there has been some concern about inflation spiking and long-dormant hyperinflation returning as the economy opens back up. These concerns are not unreasonable given the fact that manufacturers continue to struggle with obtaining supplies and commodities prices continue to rise. Most economists expect there to be high inflation in mid-to-late 2021 as consumer enthusiasm outstrips depleted COVID-19 supply chains. However, long-term market and Federal Reserve expectations remain skeptical about long-term hyperinflation not seen in a generation.

Yesterday, Federal Reserve Chair Jay Powell did not sound like the Fed was even thinking about thinking about raising rates and the market expectation of 2.43% average inflation over the next 5 years remains well outside of hyperinflation territory. Reopening might be rough for consumers, but there is no reason so far to think it will be anything more than a temporary rough patch. It seems more likely than not that supply chains will recover and adjust properly as the economy gets back to normal.


The division of Economics and Public Policy at Zions Bank informs and educates employees, clients, and the community-at-large by providing insight and analysis on issues related to local, national and global economic trends as well as federal banking policies. The primary goal of the Economic and Public Policy team is to help individuals and businesses understand important issues that can impact their daily financial decisions. For more information and analysis, please visit

Content is offered for informational purposes only and should not be construed as tax, legal, financial or business advice. Please contact a professional about your specific needs and advice. Content may contain trademarks or trade names owned by parties who are not affiliated with Zions Bancorporation, N.A. Use of such marks does not imply any sponsorship by or affiliation with third parties, and Zions Bancorporation, N.A. does not claim any ownership of or make representations about products and services offered under or associated with such marks.

Share This Article With Your Community