Now Hiring

Friday's March employment numbers showed another month of steady jobs gains and an unemployment rate just a tenth of a percentage point above its prepandemic low of 3.5%. But the composition of the U.S. workforce is meaningfully different today than it was about two years ago, writes Barron's Evie Liu.

For starters, there are fewer workers in the job market: The total number of employees on U.S. nonfarm payrolls was 151 million in March, about 1.6 million shy of February 2020. Some people who left the workforce during the Covid-19 pandemic are just never coming back.

Under the surface, the jobs recovery has also been uneven across industries and sectors. It's a sign of the structural changes in the U.S. economy that the pandemic has brought about.

Here's Evie:

Some sectors have staged a full recovery since the pandemic. The trade, transportation, and utilities; professional and business services; information; and financial activities sectors have all exceeded prepandemic levels of hiring.

Two sectors of the labor market are shining particularly bright: trade, transportation, and utilities; and professional and business services. Most of the jobs added within the trade, transportation, and utilities industry have been couriers, messengers, as well as warehouse and storage workers. That’s likely due to an uptick in e-commerce throughout the pandemic.

On the opposite end of the spectrum are industries including mining and logging; construction; manufacturing; education and health services; and the government—all are still below their prepandemic employment levels.

The biggest shortfall in jobs comes from the leisure and hospitality industry, which employed roughly 1.5 million fewer people in March 2022 than in February 2020. That's an 8% decrease overall, with payrolls at hotels still down 19% from their pre-pandemic level.

Leisure and hospitality jobs are finally making a comeback, however. The sector was responsible for about a quarter of the March employment growth of 431,000 jobs.

Evie continues:

Within leisure and hospitality, restaurants and bars made the biggest contribution, adding 61,000 new jobs in March. Hotels created 25,000 new jobs, while amusements, gambling, and recreation added 16,000 new jobs. While a smaller number of people, performing arts and spectator sports, as well as museums and other historical sites, saw strong gains in March too.

Indeed, hiring in the leisure and hospitality industry has been strong over the past year. Across the entire industry, the number of total leisure and hospitality jobs has increased about 16% year over year—the strongest among all sectors.

As the pandemic continues to recede and Americans get back to traveling and eating out more again—and international tourists return—those positions should continue to open up. Whether there will be enough workers in the right places to fill them will be another question.

Read the rest of Evie's report and check out her numerous charts and graphics illustrating U.S. job-market trends here.