US employment probably swelled in March by the most in five months as millions of COVID-19 vaccinations and a more open economy helped invigorate hiring, including at businesses hit hardest by the pandemic.
Friday’s monthly jobs report will show 650,000 people were added to payrolls and the unemployment rate dropped to 6 percent, according to the median forecasts of economists surveyed by Bloomberg. Some are projecting an increase of 1 million or more, which would be the sharpest gain since August.
The rate of coronavirus vaccinations rose above 2 million per day in March and dozens of states eased pandemic-related business restrictions or lifted them altogether. That likely boosted hiring in sectors most depressed by the health crisis, such as leisure and hospitality, which have been slow to rebound because of limits on capacity and in-person activities.
“We know that the sector is still running pretty lean for jobs relative to pre-COVID levels, so there’s room for a nice bounce in job creation in that sector,” said Michelle Meyer, head of US economics at Bank of America.
Some industries like food services may also step up hiring in anticipation of stronger sales in coming months, she said.
ADP Research Institute data on Wednesday showed companies in March added the most jobs in six months, led by a big pickup in hiring at leisure and hospitality businesses. Total private payrolls increased 517,000 during the month and February employment was revised up to a 176,000 gain.
Meanwhile, President Biden signed a $1.9 trillion economic stimulus bill on March 11 that included direct relief payments, an extension of unemployment benefits, aid for restaurants, and funding for vaccinations and testing. That should spur further employment growth in the coming months as more money circulates through the economy.
In addition, Biden on Wednesday unveiled a $2.25 trillion infrastructure plan — paid for by steep tax hikes on businesses. The proposal aims to create new jobs through programs such as a new Civilian Climate Corps, construction of affordable housing, and efforts to clean up abandoned mines and capping old oil and gas wells.
“Well-designed public investment can spur innovation and can spur productivity and it can spur job growth all around America,” Brian Deese, director of the National Economic Council, said on Bloomberg Television Wednesday. “This is about public sector investments that we know will actually generate job growth.”