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The U.S. experienced a hiring surge during President Biden's first full month in office. According to the Labor Department, the U.S. economy added 379,000 jobs in February. The unemployment rate also improved, dropping a tenth of a point to 6.2%. Diane Swonk, chief economist at Grant Thornton, joined CBSN to discuss what the latest job numbers mean for the state of the economy.
- The US experienced a hiring surge during President Biden's first full month in office. According to the Labor Department, the US economy added 379,000 jobs in the month of February. The unemployment rate also improved, dropping a tenth of a point to 6.2%.
Diane Swonk is the chief economist at Grant Thornton. She joins me now for more on February's job numbers. Diane, great to see you again. Thank you for being with us. So this is just a snapshot of the current state of the US economy, but what does it tell you about the ongoing impact of the coronavirus pandemic on our country? Does it show that we're finally turning a corner of sorts?
DIANE SWONK: Well we're certainly trying, and I think that's important. If we kept seeing job gains of the kind we saw last month, it would still take us 25 months to recoup the jobs still in the hole, the 9.5 million still in the hole from the crisis. So that's still a long ways away. So I think that's important to keep in mind.
Also, what was important in today's job numbers was revisions to both December and January, which showed December was even worse, and then a bit of a better bounce-back in January. And that really gets to the fragility of the economy and the dependence on these stimulus and aid bills. Once consumers got stimulus checks in their pockets, not only did they go out and reverse three months of declines in retail sales in the month of January, we also saw more jobs added than were initially counted. Much of the jobs that came back in February were in the leisure and hospitality sector.
Where we're still missing them is a sector you were talking about just previously, and that's in education at the state and local level because too many schools are still online. 1.4 million workers have disappeared from mostly education at the state and local level since a year ago in February, which was the peak of the previous expansion before we saw all of those job losses related to the crisis. And that's one of the things we're really worried about because we don't only need to recall those jobs back but, as you mentioned, the need for students to recoup education lost to the pandemic, that's going to be year-round schooling and the need to bring even more people in to keep students spaced out, everyone safe, as we deal with coming back online where we're still dealing with not everyone being vaccinated yet.
- Absolutely. And it's so devastating to hear these numbers when we know that there are teacher shortages, and they're in need more than ever. One can only hope, when this money gets funneled through, when the bill is passed, that there's the brainpower on the other end. That's always what you worry about, that the money gets used well, that it gets used wisely, that there are people who are able to then translate that into hiring the right people and able to actually fix the problems that need to be fixed because you can't just throw money at the problem. You have to have actual human talent at the other end to fix some of these problems.
DIANE SWONK: Absolutely. And I think one of the issues that we're dealing with now is not only was the educational gaps that we saw. K through 12, young children, middle school children, really got hit here. And then high school children who dropped out, we know from other disasters that it's really hard to get them back in again. And you don't want to limit their entire earnings potential because of the pandemic.
But we also saw a lot of students drop out of college as well. So those college grads that everyone's looking for, people took time off and deferred when they went back to school because of the move to online as well. And students that were coming from households earning less than $75,000 a year were more than twice as likely to drop out of college during the pandemic. So all of those factors together really get to the issues we're looking at in today's employment report, which is we still need support for an economy that's still dealing with a crisis.
And it's important to remember that we're still in a very deep hole. Even the unemployment rate, which dipped down to 6.2%, it's there because we're 4.3 million fewer people in the labor force today than there were a year ago. And we're not classifying some of the workers who are unemployed in the right way. When you add those workers back in, the actual unemployment rate is closer to 9.5%. And when you get to the low wage workers that were hit hardest and the inequalities that you referenced in the earlier segment, they're also showing up in the education system, the unemployment rate among the bottom quartile of workers is close to 20%. That's depression era levels of unemployment that we're still dealing with today.
- So much work still to be done. And Diane, of course, a series of deadly winter storms knocked out power to millions of Americans in February, the month that we're discussing the job numbers of right now. So how might this have impacted the accuracy of last month's job numbers?
DIANE SWONK: That's a really great question. It didn't have as big of an impact as it could have had because the worst of the power outages were actually a week after the survey was taken. But it also means it didn't capture some of the loss in construction activity. We did see construction down in these numbers. It didn't capture all of it because of the polar vortex that we saw that then resulted from everything from burst pipes and actual power outages across much of the South. And that is going to show up in the retail spending data in the month of February and also show up in everything from homebuilding to home construction-- homebuilding to home buying activity during the month. So I think we will see some weakness resulting from the storms that we saw in February, not as much were reflected in this data as one would have imagined, and that was because of the timing of when the actual survey was taken. It got part of it but not all of it and not the worst of it.
- Diane Swonk, thank you so much. Always a pleasure to have you with us.
DIANE SWONK: Thank you.