The Biden Boom: A Sprinting Economic Recovery That Is Already Broad Based

To say that the March jobs report released this morning was good news would be a serious understatement. The United States added 916,000 jobs in March (that’s almost a million), and the unemployment rate dropped two-tenth of a percentage point to 6%.

This is the first jobs report after the enactment of the American Rescue Plan, and it appears that the massive COVID stimulus is already working. People are heading back to their jobs, schools are opening, and employers are preparing for a booming economy this year with a 6.5% estimated growth rate. That not only reverses last year’s 3.5% decline in GDP and higher than the 4.2% that was estimated just months ago, but it will be the fastest economic growth in almost 40 years. Not since the year 1984 have we experienced growth like this.

But what is likely to be different from 1984 is that the coming Biden boom is poised to be inclusive, broad-based, and yield the lion’s share of its benefits to working people. There are already indications in the March employment report that things are moving in this direction.

First, the Biden job growth is no longer a fluke. We now have data for three jobs reports under this President, and in an observation no one else has noted, Joe Biden keeps doubling the pace of job creation every month.

In January, the US added 233,000 jobs, and in February, Biden’s first full month in office, that number more than doubled to 468,000. The 916,000 jobs created in March nearly doubled that number again.

The pace of job creation fell so badly at the end of Donald Trump’s last months in office that at the end of January, the 3-month moving average of job created - which is often a better longer-term measure of the health of the job market than single-month numbers - stood at just 64,000 jobs a month. In February, the average jumped to 132,000, a 107% increase. Then with March’s numbers added in, the 3-month moving average now stands 538,000 jobs a month, which is a 408% increase in the pace from last month.

Hospitality, education, and construction were the sectors that gained the most jobs, as the economy continues to open safely on the winds of the Biden administration’s massive vaccination success and people return to their working- and middle-class jobs. 190,000 total jobs were added in schools, 176,000 in restaurants and bars, 110,000 in construction.

Just as impressive as the overall jobs numbers is how the impact is being distributed. Early signs indicate that the Biden recovery is touching the people who need it most. Although the overall unemployment rate dropped 0.2 percentage points last months, the subgroup that experienced the largest drop in unemployment was people without a high school diploma, whose unemployment rate dropped by a jaw-dropping 1.9 percentage points. Overtime hours have increased by several-fold, pointing to more money in the pockets of the working class.

Declining unemployment is also benefiting ethnic groups on a broad basis, with Black and Latino Americans slightly outpacing whites in job gain.

The white unemployment rate dropped 0.2 pp in February (5.6% to 5.4), while Black unemployment dropped by 0.3 pp (9.9% to 9.6). Latino/Hispanic unemployment dropped the fastest, by 0.6 pp (8.5% to 7.9). Asian unemployment was the outlier and did jump almost a point, but that is likely adjusting for the fact that it had dropped by 1.5 points last month, also an outlier.

This is a broad-based recovery. The Biden recovery is going to be a rising tide that lifts all boats.

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