US economy rebounds at fastest pace since 1984

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The fast Covid-19 rollout and government stimulus packages untied the hands of US employers in March, Reuters reported. Official figures show robust growth in demand for workforce.

“The economy is on fire, fueled by vaccines and government stimulus,” Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles told Reuters. “All the stars are lined up to surprise us on the upside.” Nonfarm payrolls surged by 647,000 jobs last month after increasing by 379,000 in February. That is the biggest gain since October. Estimates ranged from as low as 115,000 to as high as 1.1 million jobs.

Friday’s report marks a painful anniversary for the labor market. The March 2020 employment report was the first to reflect the mandatory closures of non-essential businesses such as restaurants, bars and gyms to slow the onset of the just-emerging Covid-19 pandemic. Nearly 1.7 million jobs were lost that month, and another 20.7 million would vanish the next.

Even as the March 2021 employment gains come in as estimated, it leaves the labor market roughly 8.8 million jobs shy of its peak level in February 2020. Economists estimate it could take at least two years to recoup the more than 22 million jobs lost during the pandemic. As of Tuesday morning, the US had administered 147.6 million doses of Covid-19 vaccines in the country and distributed 189.5 million doses, according to the US Centers for Disease Control and Prevention. The White House’s massive $1.9 trillion pandemic relief package approved in March is sending additional $1,400 checks to qualified households and fresh funding for businesses.

That led to a significant improvement in labor market conditions last month. Reports this week showed a measure of factory employment jumped in March to the highest since February 2018, while layoffs announced by U.S. companies were the fewest in more than 2-1/2 years. First-quarter gross domestic product estimates go as high as an annualized rate of 10.0%. The economy grew at a 4.3% pace in the fourth quarter. Growth this year could top 7%, which would be the fastest since 1984. The economy contracted 3.5% in 2020, the worst performance in 74 years.

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