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Has the Labor Market Recovered from the COVID-19 Pandemic?

I recently had the pleasure of speaking at the National Association for Business Economics Policy Conference, regarding labor market recovery. Today I’m sharing some highlights from that talk, updated to include the latest BLS data.

There continues to be widespread interest in how well U.S. labor markets are recovering from the massive job losses at the start of the COVID-19 pandemic. Not only does this interest involve counting the number of jobs, but it also includes shifts in labor skills and changes in compensation levels. Some parts of the labor market may emerge from a recession very differently from how they entered. This difference could be in skills required, compensation, changes in the workplace, or a worker’s use of capital. Thus, we always should consider the possibility that recovery in a labor market will differ from what we had before the economic shock. In other words, we should be ready to be surprised.

What does “labor market recovery” mean? According to the National Bureau of Economic Research, the pandemic-related recession lasted just 2 months in the first half of 2020. But we know resumption of work varied considerably over the past 2 years, with some industries maintaining or even expanding employment in the early months of the pandemic, while others continue a slower return to pre-pandemic work levels.

Let’s now step through some ways to understand labor market recovery. Many observers would define recovery as a return to the employment levels before the recession, or, in our case, before the economic collapse and slower economic activity as the pandemic continued. We measure this definition of recovery by the number of jobs below and above the February 2020 levels. Based on our most recent data releases, total nonfarm employment, as measured by the BLS Current Employment Statistics survey, has recovered 93 percent of the jobs lost in March and April 2020. This chart shows the change in employment since February 2020 for major industry groups. It’s easy to see industries with large gains and industries that have not yet recovered their previous employment level.

Change in jobs in each industry in March 2022 above or below the levels of February 2020

Editor’s note: Data for this chart are available in the table below.

However, this straightforward definition of recovery does not account for the growth in the civilian population (16 years and older) over the past 2 years, which constitutes the base of employment and potential employment. The U.S. population age 16 and older grew by around 3.8 million between February 2020 and March 2022. Thus, we could define recovery as total jobs from February 2020 plus additional employment to account for population growth.

Of course, that does not account for one of the principal labor market characteristics of the past 2 years: The number of workers who left the labor force and never returned. Looking at data from the Current Population Survey, we learn that many of those people who are not in the labor force indicate that they want a job but are not looking. That number rose by nearly 5 million at the beginning of the pandemic but has declined significantly since then. In fact, it was still 741,000 higher in March 2022 than in February of 2020. And we still have nearly a million people who say they are not looking for work now because of the pandemic.

People not in labor force who say they want a job now, January 2006 to March 2022

Editor’s note: Data for this chart are available in the table below.

In addition to these straightforward concepts of recovery, our colleagues at the Bureau of Economic Analysis report on our nation’s output of goods and services, called Gross Domestic Product (GDP). Nominal GDP was $4.5 trillion higher in the fourth quarter of 2021 than in the depths of the recession in the second quarter of 2020; after adjusting for inflation, real GDP was $2.5 trillion higher. Both nominal and real GDP were also higher in the fourth quarter of 2021 than in the quarters before the pandemic and recession. The recovery in output implies that the current labor force is enough to support more GDP than we had in the pre-pandemic economy.

Likewise, the BLS index of total private sector labor hours is 99.9 percent recovered from its February 2020 level.

Index of total weekly hours of all employees, private sector, May 2007 to March 2022

Editor’s note: Data for this chart are available in the table below.

Still another way to think about labor market recovery is to measure the return of demand for labor. Labor demand is tricky because it is driven by so many factors in the product and service markets. That said, some recent evidence is instructive. In February 2022, the Job Openings and Labor Turnover Survey reported 11.3 million job openings, which is near a historical high. Hires stood at 6.7 million, and separations at 6.1 million. That’s a hires rate of 4.4 percent, little changed from the prior 12 months. In short, demand is high and rising, but hires remain relatively flat and at a normal level.

Job openings, hires, and separations rates, total nonfarm, January 2019 to February 2022

Editor’s note: Data for this chart are available in the table below.

Finally, there’s the issue of labor force participation, the percentage of people age 16 and older who either are working or have looked for work in the past 4 weeks. The latest rate is 62.4 percent in March 2022, up from a low of 60.2 percent in April 2020. However, the rate stood at 63.4 percent in January and February of 2020.

For people ages 25 to 54, the March 2022 labor force participation rate for men was 88.7 percent, compared with 89.3 percent in January 2020. For women, the March 2022 rate was 76.5 percent, down from 76.9 percent in January 2020. Both rates, but particularly the rate for women, were buffeted by the waves of infections and the closing of schools and daycare facilities.

Labor force participation rates of people ages 25 to 54, January 2019 to March 2022

Editor’s note: Data for this chart are available in the table below.

Let me conclude with a few observations. First, we see total work hours returning to their pre-pandemic level and GDP increasing. Labor force participation continues to lag its pre-pandemic rate. The recovery in output suggests the lagging labor force participation may result from demographic and other social factors, and not just economic conditions.

Change in jobs in each industry in March 2022 above or below the levels of February 2020
IndustryEmployment change

Professional and business services

723,000

Transportation and warehousing

607,500

Retail trade

278,300

Financial activities

41,000

Information

26,000

Construction

4,000

Utilities

-10,000

Mining and logging

-86,000

Wholesale trade

-103,900

Manufacturing

-128,000

Other services

-291,000

Education and health services

-456,000

Government

-710,000

Leisure and hospitality

-1,474,000
People not in labor force who say they want a job now
MonthWant a job now

Jan 2006

4,964,000

Feb 2006

4,901,000

Mar 2006

4,918,000

Apr 2006

4,719,000

May 2006

4,635,000

Jun 2006

4,726,000

Jul 2006

4,862,000

Aug 2006

4,951,000

Sep 2006

4,666,000

Oct 2006

4,868,000

Nov 2006

4,818,000

Dec 2006

4,390,000

Jan 2007

4,506,000

Feb 2007

4,706,000

Mar 2007

4,565,000

Apr 2007

4,794,000

May 2007

4,968,000

Jun 2007

4,857,000

Jul 2007

4,737,000

Aug 2007

4,827,000

Sep 2007

4,750,000

Oct 2007

4,352,000

Nov 2007

4,648,000

Dec 2007

4,657,000

Jan 2008

4,846,000

Feb 2008

4,739,000

Mar 2008

4,718,000

Apr 2008

4,733,000

May 2008

4,851,000

Jun 2008

4,929,000

Jul 2008

5,023,000

Aug 2008

4,922,000

Sep 2008

5,153,000

Oct 2008

5,094,000

Nov 2008

5,421,000

Dec 2008

5,431,000

Jan 2009

5,708,000

Feb 2009

5,617,000

Mar 2009

5,807,000

Apr 2009

5,927,000

May 2009

5,986,000

Jun 2009

5,908,000

Jul 2009

6,003,000

Aug 2009

5,649,000

Sep 2009

5,949,000

Oct 2009

6,002,000

Nov 2009

5,998,000

Dec 2009

6,186,000

Jan 2010

5,942,000

Feb 2010

6,098,000

Mar 2010

5,993,000

Apr 2010

5,913,000

May 2010

5,824,000

Jun 2010

5,909,000

Jul 2010

5,895,000

Aug 2010

6,037,000

Sep 2010

6,270,000

Oct 2010

6,289,000

Nov 2010

6,182,000

Dec 2010

6,431,000

Jan 2011

6,472,000

Feb 2011

6,390,000

Mar 2011

6,527,000

Apr 2011

6,537,000

May 2011

6,289,000

Jun 2011

6,519,000

Jul 2011

6,513,000

Aug 2011

6,463,000

Sep 2011

6,262,000

Oct 2011

6,384,000

Nov 2011

6,538,000

Dec 2011

6,323,000

Jan 2012

6,343,000

Feb 2012

6,335,000

Mar 2012

6,302,000

Apr 2012

6,426,000

May 2012

6,309,000

Jun 2012

6,564,000

Jul 2012

6,516,000

Aug 2012

7,011,000

Sep 2012

6,817,000

Oct 2012

6,551,000

Nov 2012

6,833,000

Dec 2012

6,728,000

Jan 2013

6,637,000

Feb 2013

6,772,000

Mar 2013

6,670,000

Apr 2013

6,428,000

May 2013

6,726,000

Jun 2013

6,614,000

Jul 2013

6,526,000

Aug 2013

6,284,000

Sep 2013

6,119,000

Oct 2013

6,024,000

Nov 2013

5,754,000

Dec 2013

6,126,000

Jan 2014

6,360,000

Feb 2014

6,011,000

Mar 2014

6,174,000

Apr 2014

6,207,000

May 2014

6,553,000

Jun 2014

6,207,000

Jul 2014

6,264,000

Aug 2014

6,376,000

Sep 2014

6,326,000

Oct 2014

6,431,000

Nov 2014

6,558,000

Dec 2014

6,406,000

Jan 2015

6,300,000

Feb 2015

6,503,000

Mar 2015

6,355,000

Apr 2015

6,221,000

May 2015

6,051,000

Jun 2015

6,130,000

Jul 2015

6,097,000

Aug 2015

5,890,000

Sep 2015

5,868,000

Oct 2015

5,997,000

Nov 2015

5,649,000

Dec 2015

5,909,000

Jan 2016

6,006,000

Feb 2016

5,927,000

Mar 2016

5,730,000

Apr 2016

5,812,000

May 2016

5,962,000

Jun 2016

5,590,000

Jul 2016

5,906,000

Aug 2016

5,752,000

Sep 2016

6,017,000

Oct 2016

5,948,000

Nov 2016

5,864,000

Dec 2016

5,668,000

Jan 2017

5,758,000

Feb 2017

5,653,000

Mar 2017

5,758,000

Apr 2017

5,708,000

May 2017

5,465,000

Jun 2017

5,277,000

Jul 2017

5,425,000

Aug 2017

5,734,000

Sep 2017

5,637,000

Oct 2017

5,293,000

Nov 2017

5,219,000

Dec 2017

5,275,000

Jan 2018

5,191,000

Feb 2018

5,169,000

Mar 2018

5,044,000

Apr 2018

5,163,000

May 2018

5,188,000

Jun 2018

5,204,000

Jul 2018

5,195,000

Aug 2018

5,413,000

Sep 2018

5,288,000

Oct 2018

5,408,000

Nov 2018

5,398,000

Dec 2018

5,320,000

Jan 2019

5,262,000

Feb 2019

5,216,000

Mar 2019

5,136,000

Apr 2019

5,107,000

May 2019

4,994,000

Jun 2019

5,272,000

Jul 2019

4,999,000

Aug 2019

5,212,000

Sep 2019

4,852,000

Oct 2019

4,778,000

Nov 2019

4,849,000

Dec 2019

4,839,000

Jan 2020

4,937,000

Feb 2020

4,996,000

Mar 2020

5,462,000

Apr 2020

9,921,000

May 2020

8,916,000

Jun 2020

8,182,000

Jul 2020

7,712,000

Aug 2020

7,070,000

Sep 2020

7,194,000

Oct 2020

6,685,000

Nov 2020

7,120,000

Dec 2020

7,277,000

Jan 2021

6,956,000

Feb 2021

6,923,000

Mar 2021

6,822,000

Apr 2021

6,628,000

May 2021

6,583,000

Jun 2021

6,422,000

Jul 2021

6,529,000

Aug 2021

5,701,000

Sep 2021

5,918,000

Oct 2021

5,935,000

Nov 2021

5,819,000

Dec 2021

5,713,000

Jan 2022

5,704,000

Feb 2022

5,355,000

Mar 2022

5,737,000
Index of total weekly hours of all employees, private sector, May 2007 to March 2022
MonthIndex

May 2007

100.0

Jun 2007

100.3

Jul 2007

100.1

Aug 2007

100.0

Sep 2007

100.0

Oct 2007

99.8

Nov 2007

100.1

Dec 2007

100.2

Jan 2008

100.2

Feb 2008

100.1

Mar 2008

100.3

Apr 2008

99.5

May 2008

99.6

Jun 2008

99.5

Jul 2008

99.0

Aug 2008

98.7

Sep 2008

98.1

Oct 2008

97.6

Nov 2008

96.7

Dec 2008

95.6

Jan 2009

95.1

Feb 2009

94.5

Mar 2009

93.3

Apr 2009

92.6

May 2009

92.4

Jun 2009

91.7

Jul 2009

91.8

Aug 2009

91.6

Sep 2009

91.7

Oct 2009

91.2

Nov 2009

91.5

Dec 2009

91.3

Jan 2010

91.9

Feb 2010

91.0

Mar 2010

91.6

Apr 2010

92.1

May 2010

92.2

Jun 2010

92.3

Jul 2010

92.3

Aug 2010

92.7

Sep 2010

93.1

Oct 2010

93.3

Nov 2010

93.1

Dec 2010

93.5

Jan 2011

93.2

Feb 2011

93.7

Mar 2011

93.9

Apr 2011

94.5

May 2011

94.3

Jun 2011

94.5

Jul 2011

94.9

Aug 2011

94.8

Sep 2011

95.3

Oct 2011

95.5

Nov 2011

95.6

Dec 2011

95.8

Jan 2012

96.4

Feb 2012

96.6

Mar 2012

96.6

Apr 2012

96.9

May 2012

96.7

Jun 2012

96.8

Jul 2012

96.9

Aug 2012

97.1

Sep 2012

97.2

Oct 2012

97.4

Nov 2012

97.5

Dec 2012

98.0

Jan 2013

97.9

Feb 2013

98.4

Mar 2013

98.6

Apr 2013

98.4

May 2013

98.9

Jun 2013

99.1

Jul 2013

98.9

Aug 2013

99.4

Sep 2013

99.3

Oct 2013

99.5

Nov 2013

100.0

Dec 2013

99.8

Jan 2014

99.9

Feb 2014

99.8

Mar 2014

100.6

Apr 2014

100.8

May 2014

101.1

Jun 2014

101.3

Jul 2014

101.5

Aug 2014

102.0

Sep 2014

101.9

Oct 2014

102.4

Nov 2014

102.6

Dec 2014

102.9

Jan 2015

102.7

Feb 2015

103.2

Mar 2015

103.0

Apr 2015

103.2

May 2015

103.5

Jun 2015

103.7

Jul 2015

103.9

Aug 2015

104.0

Sep 2015

104.1

Oct 2015

104.7

Nov 2015

104.6

Dec 2015

104.8

Jan 2016

105.2

Feb 2016

104.7

Mar 2016

104.9

Apr 2016

105.1

May 2016

105.1

Jun 2016

105.3

Jul 2016

105.6

Aug 2016

105.4

Sep 2016

105.9

Oct 2016

106.0

Nov 2016

106.2

Dec 2016

106.3

Jan 2017

106.5

Feb 2017

106.3

Mar 2017

106.5

Apr 2017

106.9

May 2017

107.1

Jun 2017

107.3

Jul 2017

107.4

Aug 2017

107.6

Sep 2017

107.4

Oct 2017

107.8

Nov 2017

108.2

Dec 2017

108.4

Jan 2018

108.2

Feb 2018

108.8

Mar 2018

109.0

Apr 2018

109.2

May 2018

109.4

Jun 2018

109.6

Jul 2018

109.6

Aug 2018

109.8

Sep 2018

109.9

Oct 2018

110.0

Nov 2018

109.8

Dec 2018

110.3

Jan 2019

110.5

Feb 2019

110.2

Mar 2019

110.7

Apr 2019

110.6

May 2019

110.6

Jun 2019

110.7

Jul 2019

110.9

Aug 2019

111.0

Sep 2019

111.0

Oct 2019

111.1

Nov 2019

111.0

Dec 2019

111.1

Jan 2020

111.4

Feb 2020

111.9

Mar 2020

109.7

Apr 2020

93.2

May 2020

97.3

Jun 2020

101.0

Jul 2020

102.1

Aug 2020

103.4

Sep 2020

104.6

Oct 2020

105.6

Nov 2020

105.6

Dec 2020

105.2

Jan 2021

106.5

Feb 2021

105.9

Mar 2021

107.4

Apr 2021

107.6

May 2021

107.9

Jun 2021

108.0

Jul 2021

108.6

Aug 2021

108.7

Sep 2021

109.4

Oct 2021

110.0

Nov 2021

110.5

Dec 2021

111.0

Jan 2022

110.8

Feb 2022

111.8

Mar 2022

111.8
Job openings, hires, and separations rates, total nonfarm, January 2019 to February 2022
MonthJob openings rateHires rateSeparations rate

Jan 2019

4.7%3.8%3.7%

Feb 2019

4.53.83.8

Mar 2019

4.63.83.7

Apr 2019

4.64.03.8

May 2019

4.63.83.7

Jun 2019

4.53.83.7

Jul 2019

4.53.93.9

Aug 2019

4.53.93.7

Sep 2019

4.53.93.8

Oct 2019

4.73.83.7

Nov 2019

4.43.93.7

Dec 2019

4.33.93.8

Jan 2020

4.53.93.8

Feb 2020

4.44.03.8

Mar 2020

3.83.510.8

Apr 2020

3.53.18.9

May 2020

3.96.13.6

Jun 2020

4.25.43.8

Jul 2020

4.54.53.7

Aug 2020

4.34.33.4

Sep 2020

4.44.23.6

Oct 2020

4.64.33.7

Nov 2020

4.64.14.0

Dec 2020

4.64.04.0

Jan 2021

4.84.03.6

Feb 2021

5.24.23.8

Mar 2021

5.54.33.8

Apr 2021

6.04.24.0

May 2021

6.24.23.8

Jun 2021

6.34.44.0

Jul 2021

6.94.54.0

Aug 2021

6.74.34.0

Sep 2021

6.84.44.1

Oct 2021

7.04.44.0

Nov 2021

6.84.54.2

Dec 2021

7.14.34.1

Jan 2022

7.04.34.0

Feb 2022

7.04.44.1
Labor force participation rates of people ages 25 to 54, January 2019 to March 2022
MonthTotalMenWomen

Jan 2019

82.5%89.3%75.8%

Feb 2019

82.589.475.8

Mar 2019

82.589.675.5

Apr 2019

82.389.275.5

May 2019

82.288.975.7

Jun 2019

82.288.875.9

Jul 2019

82.188.975.4

Aug 2019

82.689.076.3

Sep 2019

82.789.276.4

Oct 2019

82.889.176.7

Nov 2019

82.889.276.6

Dec 2019

82.989.176.8

Jan 2020

83.189.376.9

Feb 2020

83.089.276.9

Mar 2020

82.589.076.1

Apr 2020

79.986.473.5

May 2020

80.687.274.3

Jun 2020

81.587.875.3

Jul 2020

81.287.575.1

Aug 2020

81.487.974.9

Sep 2020

81.087.774.4

Oct 2020

81.287.874.8

Nov 2020

80.987.374.6

Dec 2020

81.087.474.7

Jan 2021

81.187.674.7

Feb 2021

81.287.674.9

Mar 2021

81.387.675.2

Apr 2021

81.487.975.1

May 2021

81.487.975.0

Jun 2021

81.788.175.4

Jul 2021

81.988.375.6

Aug 2021

81.888.375.4

Sep 2021

81.688.275.3

Oct 2021

81.788.175.4

Nov 2021

81.988.275.7

Dec 2021

81.988.075.9

Jan 2022

82.088.276.0

Feb 2022

82.288.875.8

Mar 2022

82.588.776.5