Economy adds 379,000 payrolls, unemployment rate falls to 6.2%

The U.S. economy added back the most jobs in four months in February, as easing COVID-19 case counts and a ramping vaccine rollout allowed distancing restrictions to begin to moderate. The unemployment rate also unexpectedly improved during the month.

• Non-farm payrolls: +379,000 vs. +200,000 expected and a revised +166,000 in January

• Unemployment rate: 6.2% vs. 6.3% expected and 6.3% in January

• Average hourly earnings, month-over-month: 0.2% vs. 0.2% expected and a revised 0.1% in January

• Average hourly earnings, year-over-year: 5.3% vs. 5.3% expected and a revised 5.3% in January

The February jobs report also included a notable upward revision to payrolls gains in January, but a downward revision to losses in December. January's payroll gain was revised to 166,000, up from the tepid rise of 49,000 previously reported. However, December's payroll losses – the first since April — were revised to 306,000, from the drop of 227,000 reported earlier. Altogether, the U.S. economy remains about 9.5 million payrolls short of its pre-pandemic levels.

But last month, job growth accelerated as declining new COVID-19 cases and broadening vaccine-conferred immunity helped more businesses reopen with greater capacity. The unemployment rate unexpectedly improved to 6.2%, improving significantly from the pandemic-era high of 14.8%, but holding still well above the 50-year-low of 3.5% from February 2020. And the tick lower in the unemployment rate came even as the labor force participation rate held steady at 61.4%.

"Today’s employment report smashed expectations as 379K jobs returned to the economy during the month of February. This was a welcomed change of events for a suppressed labor market as we begin to turn the helm on a restrained economy and open back up," Charlie Ripley, senior investment strategist for Allianz Investment Management, said in an email Friday morning. "Looking ahead, it appears the ship is pointed in the right direction and the additional stimulus coming from Congress should be the wind in the sails to get the economy back on track."

Still, however, some economists warned against getting too excited about the recovery too quickly, given the ground the economy still needs to recuperate to return to pre-pandemic levels.

"Now in the second year of the pandemic, the labor market has 9.5 million fewer jobs than it did before the coronavirus arrived in the U.S. That gap rises to 11.5 million once you consider the jobs gains we would have seen absent the crisis," Nick Bunker, Indeed economic research director, wrote in an email. "At this pace, it will take about four and a half years to get back to where the labor market would have been without the pandemic. Millions of Americans out of work do not have that time."