The Bureau of Labor Statistics published its monthly report for March, showing there was a slight increase in the employment rate, as the unemployment rate reaches levels similar to February 2020. The report also notes, however, that there still is a small gap between the size of the labor force before the pandemic and today.
According to the BLS report, the American economy added a total of 431,000 new jobs in March and the unemployment rate decreased from 3.8% to 3.6%. The figures have reached a similar level of the American economy prior to the COVID-19 pandemic, when the unemployment level was 3.5%.
The piece showed that most of the employment gains came from the leisure, retail trade, and professional & business services, where more than half of the new jobs were gained. Although the March BLS report does not specify the unemployment rates by state, the February report shows that the top 10 states with the lowest unemployment rate are: Nebraska, Utah, Indiana, Kansas, Montana, Oklahoma, South Dakota, Minnesota, and New Hampshire, and Idaho.
The labor force, which is the percentage of Americans who are actively looking for jobs, has yet to recover from the pre-pandemic levels. Back in February 2020, the labor force participation rate is at 62.4%, one point lower than when the pandemic hit 2020.
Employment is up, but inflation looms large
Although the employment rate has followed an upward trend since the summer of 2020, with the number reaching pre-pandemic levels right now, the ghost of rising prices and inflation looms large both in the daily economic lives of Americans and in the political futures of President Biden.
The BLS has yet to publish its report on the Consumer Price Index (CPI) which is the one measuring the current levels of inflation in the country, but the signs are not encouraging. Last month, inflation reached a record high of 7.9%, and as the Eurozone has forecasted a new peak of inflation for this month, the ongoing war in Ukraine has brought chaos to the global energy market.
The BLS report showed that wages rose just 13 cents in March, making it a 5.6% increase in wages over the last 12 months, which is still lower than the rate inflation has risen over the last year. Polls have shown that inflation is one of the key issues that voters are concerned about, which puts Biden in a politically difficult situation as he cannot effectively leverage the good employment numbers as voters are feeling the pinch of high inflation.