The Federal Reserve says there’s evidence that hiring has picked up in recent weeks, though the job market remains badly damaged by the pandemic.
In its semi-annual monetary policy report released Friday, the Fed says it has been watching job data compiled by payroll processor ADP. The Fed has constructed its own measurement of hiring using the ADP data, and says that gauge has closely matched the government’s monthly jobs reports throughout the pandemic.
“The ADP data indicate that employment improved modestly through early February,” the Fed’s report says. It also says its measure shows that the battered leisure and hospitality industry—which includes restaurants, bars, hotels and entertainment venues—has started adding jobs again, after a “temporary downturn” at the end of last year.
The Fed has in the past several years turned increasingly to nongovernmental sources of economic data to get a quicker, more timely read on the economy. In its report, the central bank says this has proved particularly useful during the pandemic given the speed of the recession, which eliminated 22 million jobs in just two months this spring. Just 55% of those jobs have been recovered.
The report will form the basis for Federal Reserve Chair Jerome Powell’s testimony next week before committees in the House and Senate.
Hiring has stalled in the past three months, with job gains averaging just 90,000 a month from November through January. And the Fed’s report underscores that the job market is a long way from what the central bank considers “full employment.”
Roughly 4 million Americans have fallen out of the labor force since the pandemic began, meaning they are no longer working or looking for work. Powell has previously noted that if they were counted as unemployed, the jobless rate would be roughly 10%.
Still, Fed officials believe the economic outlook for later this year has brightened, according to minutes of their January meeting, released on Wednesday. The distribution of vaccines and the enactment of a $900 billion economic rescue package late last year has lifted the economy’s prospects, the minutes said. Read the full story.