President Joe Biden delivered a warning even as he touted Friday’s exceptionally positive jobs report and the accelerating pace of vaccinations in the U.S.: progress can still be reversed if Americans don’t moderate their behaviors to stop the spread of Covid-19.

“Too many Americans are acting as if this fight is over,” Biden said. “It is not.”

The comments came on the heels of the news that nonfarm payrolls increased by 916,000 for the month, smashing economist expectations of an increase of 675,000, according to a Dow Jones survey. Biden also announced that the U.S. set a record for Thursday vaccinations to cap off the first seven-day period where the country administered 20 million shots.


But the President reminded Americans there is still a long way to go when it comes to both rebuilding the economy and ending the pandemic.

“While the earliest signs from this job report announcing today are promising and the American Rescue Plan is starting to make a real difference, today’s report also reminds us how deep a hole we started in,” Biden said. “After a year of devastation, there are still 8.4 million fewer jobs today than there were last March.”

When it comes to containing the virus, Biden urged Americans “to buckle down and keep their guard up in this home stretch.”

The President discussed his new $2 trillion infrastructure package unveiled on Wednesday as a way to ensure that the country continues to create jobs and strengthen the economy. The package has already faced pushback from Republicans, some of whom claim the bill is too sweeping, while some progressives from his own party think it does not go far enough.

Biden said he’s open to discussion of his proposals, but that Congress must act.

“Changes to my plan are certain. But inaction is not an option,” he said.

Despite Republican resistance to his infrastructure package, Biden said he thinks lawmakers will be urged by their constituents to act.

“I think the Republicans’ voters are going to have a lot to say about whether we get a lot of this done,” he said.

The U.S. economy created the most jobs in seven months in March as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance this year in decades.

FILE PHOTO: Construction workers wait in line to do a temperature test to return to the job site after lunch, amid the coronavirus disease (COVID-19) outbreak, in the Manhattan borough of New York City, New York, U.S., November 10, 2020. REUTERS/Carlo Allegri/File Photo/File Photo

The Labor Department’s closely watched employment report on Friday suggested the jobs market has finally turned the corner after hitting a ditch in December. All industries added jobs last month and more people rejoined the labor force. A measure of the economy’s ability to create employment also improved.

But the road to full recovery remains long. More than four million Americans have been unemployed for over six months.

“The economy is roaring back to life,” said Brian Bethune

professor of practice, Boston College.

Nonfarm payrolls surged by 916,000 jobs last month, the biggest gain since last August. Data for February was revised higher to show 468,000 jobs created instead of the previously reported 379,000. Still, employment remains 8.4 million jobs below its peak in February 2020.

Economists polled by Reuters had forecast payrolls increasing by 647,000 jobs in March.

The employment report marked a painful anniversary for the labor market. The March 2020 employment report was the first to reflect the mandatory closures of non-essential businesses such as restaurants, bars, and gyms to slow the onset of the just-emerging COVID-19 pandemic.

Nearly 1.7 million jobs were lost that month, and another 20.7 million would vanish in April. Economists estimate it could take at least two years to recoup the more than 22 million jobs lost during the pandemic.

Job gains last month were led by the leisure and hospitality sector, where employers hired 280,000 workers. Restaurants and bars accounted for nearly two-thirds of the industry’s employment gains. Construction employment rebounded by 110,000 jobs after being depressed by harsh weather in February.

Manufacturers hired 53,000 employees. Public and private

education payrolls also increased as more schools resumed in-person learning and other school-related activities.

The dollar was steady against a basket of currencies. U.S. Treasury prices were lower. The U.S. stock market is closed for Good Friday.

GOOD PROGRESS

As of Tuesday morning, the United States had administered 147.6 million doses of COVID-19 vaccines in the country and distributed 189.5 million doses, according to the U.S. Centers for Disease Control and Prevention.

The White House’s massive $1.9 trillion pandemic relief package approved in March is sending additional $1,400 checks to qualified households and fresh funding for businesses.

Economists expect job growth will average at least 700,000 per month in the second and third quarters. That, combined with the fiscal stimulus and about $19 trillion in excess savings accumulated by households during the pandemic, is expected to unleash a powerful wave of pent-up demand.

First-quarter gross domestic product estimates are as high as an annualized rate of 10.0%. The economy grew at a 4.3% pace in the fourth quarter. Growth this year could top 7%, which would be the fastest since 1984. The economy contracted 3.5% in 2020, the worst performance in 74 years.

The unemployment rate fell to 6.0% last month from 6.2% in February. The unemployment rate has been understated by people misclassifying themselves as being “employed but absent from work.” Without the misclassification, the unemployment rate would have been 6.4% in March.

But the labor market is making progress. About 347,000 people entered the labor force in March. That lifted the labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, to 61.5% from

61.4% in February.

The employment-to-population ratio, viewed as a measure of an economy’s ability to create employment, increased to 57.8% from 57.6% in the prior month.

Long-term unemployment, however, is becoming entrenched. About 4.218 million people have been out of work for more than 27 weeks, accounting for 43.4% of the 9.7 million people classified as unemployed last month. That was up from 41.5% in February.

“The labor market has begun to turn around, but we still have a long way to go before substantial progress is made and the labor market fully recovers,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Matt Arnold just spent $5,000 to run help-wanted ads for his company’s five trailer factories scattered from Pennsylvania to Utah.

FILE PHOTO: An employee works at the Kirsh Foundry in Beaver Dam, Wisconsin, U.S., April 12, 2018. REUTERS/Timothy Aeppel/File Photo

“We hired two from the ads,” said Arnold, just a fraction of the 125 he needs to get back to full strength of 673 workers. Half the welding jobs at his Texas plant are open, for instance, creating a bottleneck in an operation that builds trailers on metal frames.

U.S. manufacturers have long grumbled about labor shortages, but the past year has proven particularly frustrating.

As the pandemic pushed millions out of work, most from service industries such as hotels and restaurants, many factories were pushed into overdrive by surging demand for everything from pickup trucks to plastic bags. And yet high jobless rates have not translated into workers flocking to open positions on assembly lines.

On Friday, the Labor Department said 916,000 jobs were created last month, the most since last August, including 53,000 manufacturing positions. That was the highest number of new factory jobs in six months.

The report’s manufacturing diffusion index, a measure of the breadth of hiring across some 75 goods-producing industries, registered one of its highest readings ever.

Manufacturing employment suffered a much less severe blow than service sector jobs last spring when COVID-19 first brought the economy effectively to a standstill. About one of every 10 factory jobs were eliminated in the shutdowns versus roughly one of every six service jobs. Factory employment is 4% below pre-pandemic levels, a deficit of 515,000 jobs, versus 5.5% for overall U.S. employment, with a total shortfall from February 2020 of 8.4 million positions.

Other indicators also point to a tight labor market at factories. Earlier this week, the Institute for Supply Management said its index for national factory activity jumped to its highest reading in 37 years in March, with its gauge of manufacturing employment rising to its highest level since February 2018.

One fabricated metal company quoted in the report said, “A lack of qualified machine and fabrication shop talent” has made it hard to keep up with demand.

UKG, which provides time management for small and mid-sized companies, said employee shift work at U.S. manufacturers was up 3.4% in mid-March from mid-February, outpacing a 2.6% increase across all industries.

Graphic: U.S. factory hiring was broad-based in March

Reuters Graphic

‘IT ISN’T HOME DEPOT’

The shortage comes at a time when the Biden administration has vowed to ramp up domestic manufacturing as part of a broader economic revival plan aimed at creating more blue-collar jobs.

“I’ve never seen it this bad,” said Arnold, president of Look Trailers, based in Middlebury, Indiana. Look builds utility trailers, which are in heavy demand from small businesses such as landscapers and plumbers as well as hobbyists who use them to haul motorcycles or other bulky sports equipment.

The lack of workers means lost business for Arnold and his customers. One of his dealers normally has about $2 million in inventory on his lot, but right now only has about $200,000. The average price of a trailer is $3,400.

Wages at his trailer factories are already far above state or federal minimums. The average starting pay is $19 an hour, while workers with skills such as welders make $24 an hour or more. “People talk about the oil boom in the Dakotas - how workers would get in their car and drive out to get jobs,” he said. “We have the same thing here, a jobs boom. But nobody’s coming.”

Many employers see a mismatch between those now out of work and the jobs in their plants.

“It isn’t Home Depot, or Starbucks, or a hotel,” said Kevin Kelly, chief executive of Emerald Packaging Inc. in Union City, California. He estimates one in five new workers quit within days and complain about the environment.

“They’re not used to machines that need to be greased,” he said, “and the smell of things like ink.” Emerald produces plastic bags for precut vegetables, which are custom printed with images and product information.

Kelly said he has better luck hiring people who have already worked in a factory. One small printing plant just closed near him, and the owner called to ask if he wanted to buy machinery. He sent a manager who ended up handing out job applications instead. They have so far hired five of the other company’s employees and are trying to get two more. Yet even with those hires, Emerald is still short 14.