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Strong jobs report offers signs of hope for an economic recovery

The U.S. Labor Department reported Friday a net gain of 916,000 jobs last month, the most since August, while the unemployment rate fell to 6 percent. The upbeat jobs report seems to confirm some economists' forecasts that the economy is on its way to recovery. Louise Sheiner, of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, joins William Brangham to discuss.

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  • Judy Woodruff:

    Today's upbeat jobs report is welcome news. As William Brangham reports, it seems to confirm recent forecasts that the economy is on its way to a stable recovery.

  • William Brangham:

    Judy, an increasingly optimistic consensus suggests that U.S. GDP could increase by roughly 6 percent in 2021, which is much higher than pre-pandemic levels. And, if that happens, we could expect job gains anywhere from 700,000 to one million per month.

    Louise Sheiner is one of the economists making those rosy forecasts. She is the policy director at the Hutchins Center on Fiscal and Monetary policy at the Brookings Institution.

    Louise Sheiner, great to have you on the "NewsHour."

    Nearly one million jobs added last month looks pretty great. I mean, what is your main takeaway from this report?

  • Louise Sheiner:

    Right.

    So, today was a great report. And so there were 916,000 jobs added, which is a huge number and, sort of before this pandemic year, would have been almost unheard of. But it's good to remember that, despite this very large increase in jobs in March, it's still true that we are about 8.5 million — dollar — jobs below where we were before the pandemic started.

    So, we really still do have a very large job deficit. And the unemployment rate, while it ticked down from 6.2 to 6 percent this month, it is still about 2.5 percent higher than it was before the pandemic. And when you think about the fact that a lot of people have left the labor force, that number is even sort of too low to gauge the level of the employment rate. And a better number might be something like 9 percent.

    So, even with today's job number, we are still sort of way below where we would have been without the pandemic. But I do think today is sort of the mark of a turning point, right? We're seeing the economy reopen — reopening, and those job gains are going to be very, very large as that happens.

    And you see that what happened is the places where we got the most job increases were the places that had been most affected by the pandemic. So, the biggest source of job gain was leisure and hospitality. And that was also the area that was most affected by the pandemic.

  • William Brangham:

    I mean, you mentioned certain sectors that are seeming to bounce back quicker.

    What are the sectors that are going to take longer, in your estimation?

  • Louise Sheiner:

    Well, I think there's a couple things there.

    One question is, which ones don't start for a while? And that's going to be maybe things that really are requiring crowded places with lots of people inside, that those are going to be waiting until the pandemic is, like, completely over.

    But I think a more interesting question, in some sense, or a more important question, is, you might see a lot of jobs come back at first. And then the question is, will all the jobs come back? So, is it possible that what the pandemic did is sort of change the occupational mix?

    So, for example, one thing I worry about or think about at least — and it's got some upsides as well — is, what's going to happen to things like business travel, right? We're doing this over Skype. We have learned how to do things over Zoom. And we have seen that a lot of things are better that way.

    (CROSSTALK)

  • William Brangham:

    Right. And the airlines and the hotels certainly don't like to hear us talk like that.

  • Louise Sheiner:

    Exactly.

    So, some things might never come back completely. Of course they're going to come back from where they are now, right? And so — but they may not come back to the same level, we might have a different post-pandemic economy.

    So, I think it's in transportation, in things related to commuting, in things related to working in an office vs. at home, those are the areas that there's some possibility that most of the jobs will come back, but not all of them. And we're not going to know that, right, for a while, right, because what we're going to be seeing in the next — over the next several months is the open — the reopening.

    But I think that's what sort of the long-run concerns are. There are some people who are not working now may not have a job to go back to ever, until they sort of switch. And then the question is, what do they do, and can they switch easily?

  • William Brangham:

    I mean, so much of what you're describing is bouncing back from this pandemic, with vaccinations and all of that making us feel like we can go back to some sense of normalcy.

    There are some upticks of infections around the country. Does your optimism get blunted at all if we do see a potential fourth surge of the virus?

  • Louise Sheiner:

    Yes, definitely.

    So, I think that, if what happens is, there's a new variant that either the vaccinations don't protect us against or we're not sure if they do, and people are scared again, stop going out to eat, stop doing all this stuff they had stopped last spring, then I think you're going to have a slower recovery, which means you're not going to get the 6 percent GDP probably, and you won't get the jobs that go along with it.

    So, I think that's possible. It'll just mean it takes longer. I mean, I presume we're eventually going to get back. And so the question is just, is the end of the year a reasonable number, or is it going to take longer?

    To get to the jobs at the end of the year, it's possible that not every job loss during the pandemic will come back, but that other jobs will come back, right? We have a lot of fiscal stimulus. There's going to be a lot of demand. And so it may be that we have most of the jobs that we lost during the pandemic, and then just some jobs sort of in general that aren't related to the pandemic, but just because there's a lot of demand.

  • William Brangham:

    All right, Louise Sheiner of the Hutchins Center, thank you so much for being here.

  • Louise Sheiner:

    And thank you so much for having me.

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