Growth in labour market is accelerating

Real-time indicators are showing a stronger than anticipated recovery in the American economy, which is being fuelled by consumer-led growth.

The indicators point to the fact that the US economy is on a solid recovery path, hinting that the magnitude of the rebound could be even more dramatic, which is being greeted by the Biden administration as a vindication of its recovery plans to make American even stronger than before.

The early indicators are revealing that sectors such as airlines, hotels and even movie theatres that have lagged in the COVID-19 pandemic shutdowns, are showing strong improvement.

This improvement comes with the acceleration in America’s vaccinations programmes. Analysts have pointed to five indicators that show that the pace of recovery may be better than previously thought with businesses in aviation, food service, hotels, movie theatres and job openings showing a strong rebound.

In particular, the rebound in the labour market was the best in seven months, where the March employment report showed that 916,000 jobs were added to the market. This was due to factory activity expanding at the fastest pace since 1983.

However, the Institute for Supply Management has made the point that the official data may be understating these gains. Analysts say there is already pointing to another strong job gain for this month.

America’s labour marketing kicking into high gear

The labor market kicked into a high gear in March and real-time data suggest it’s just the start of a continuing acceleration. Job postings increased at an even faster rate in March than in February.

In another sign of more hiring to come, the US Labor Department reported that American job openings rose to a two-year high in February. Job listings on the website ‘Indeed’ last week were 16 per cent above levels in February last year before the pandemic closed down the economy.

In the aviation sector, passengers travelling through Transportation Security Administration (TSA) checkpoints topped 1.58 million on April 2, a pandemic high.

Daily traffic has exceeded 1.5 million for three consecutive weeks after running under one million for nearly all of COVID-19. Leisure airline traffic is also picking up with Delta Air Lines set to resume selling middle seats on May 1, while American Airlines and United Airlines say their planes are running 80 per cent full.

Dining in America on the up

Restaurant reservations have seen a big improvement even though they are still down around 20 per cent from 2019 levels. This is coming from a 40 per cent fall-off in business last year.

Senior restaurant analyst with Raymond James & Associates, Brian Vaccaro told Bloomberg that, “industry trends began to improve sequentially in late February and early March, which was followed by a more material step up beginning mid-March.”

This has come about as consumers are more confident so restaurant bookings are on the rise and spending on most services amusements parks, fitness and movies, among others are accelerating.

Like airlines, hotel occupancy is on the upswing as consumers get more comfortable travelling. Hotel occupancy in mid-March jumped to the highest level in a year and has remained near that level into early April, according to STR, a lodging data tracker. The company reported to Bloomberg that the average daily rate of US$112.76 in the latest week was the highest in a year.

Resort markets including Tampa, Florida and Miami have had among the highest levels of occupancy. Entertainment venues such as live theatre, concerts, motion pictures, sports have been among the slowest to come back during the pandemic, but are now seeing improvements.

Godzilla vs. Kong helped bring in gross ticket sales of almost $44 million last weekend, according to researcher Comscore Inc. That’s the highest revenue since the pandemic began, though 70 per cent below 2019 sales.

More than half of North American theatres were open, starting in March, climbing to nearly 58 per cent in early April.