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Opinion The job market is booming. So why doesn’t it feel like it?

A sign at a McDonald's in Miami Beach. (Joe Raedle/Getty Images)
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The job market is booming. So why doesn’t it feel like it?

U.S. employers added 678,000 jobs in February. That’s a fantastic number. The gains were relatively broad-based, with many of the industries hurt most by the pandemic (leisure and hospitality, health care) showing big additions. We are finally digging our way out of the deep crater covid-19 created in employment in early 2020:

If February’s pace of job growth continues, total employment would recover to its pre-pandemic level in about three more months. That’s a way more rapid recovery than the labor market experienced after the 2007-2008 financial crisis.

Other details in the jobs report released Friday by the Bureau of Labor Statistics are worth celebrating, too.

Job gains for December and January were revised upward, showing recent hiring was even stronger than initially estimated. The unemployment rate reached a new post-pandemic low of 3.8 percent, which is just a hair’s breadth from the lowest unemployment rate of the past half-century (3.5 percent, right before the pandemic hit).

Speaking of covid, the number of people absent from work due to their own illness fell by more than half in February from January, when the level had reached an all-time high because of the omicron variant. Illness-related absenteeism is still elevated in historical terms, but workers and employers are getting back to some semblance of normal.

The question is why these great numbers aren’t registering with the public.

A February poll from a left-wing survey organization found that a plurality of 35 percent of voters believe the country is experiencing more job losses than usual. Never mind, apparently, that net job growth over the past year reached a record high and layoffs have become rare. Even Democrats, who might be more motivated to view the economy through rose-colored glasses, don’t give the labor market the full credit it deserves.

Some other surveys, including from Gallup and the Conference Board, have found that people view jobs as plentiful. But responses in these surveys to more general questions about the state of the economy, or the country have been dour.

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Another recent Gallup survey found that a plurality of Americans describe the economy as “poor,” and the vast majority believe the economy is getting “worse”; when asked, unaided, about the most important problem facing the country, nearly a third of respondents volunteered an economy-related answer.

There has been some debate about possible causes for these economic perceptions. Many have blamed media coverage for being excessively negative, focusing too often on soaring prices rather than soaring job growth. This could certainly play a role.

But inflation is bad. While the drop in unemployment is felt most saliently by a small minority of people, inflation is experienced by virtually everyone. Including the people enjoying the biggest hiring and wage gains.

Key measures of inflation recently reached 40-year highs and have outpaced overall wage growth. As of January, prices were up 7.5 percent from a year earlier, while overall average hourly wages grew 5.5 percent in that time. The average hourly wage data for February showed a slight slowdown, to 5.1 percent year over year. Given recent trends, including in energy prices, it seems likely the February inflation data being reported next week will show another year-over-year decline in real wages.

As I’ve written before, even though earnings growth has been stronger at the bottom of the income distribution, it still hasn’t eclipsed the increased expenses for these lower-income households. That’s due to the spending and work habits of poorer families. A larger share of their spending goes to gas and groceries, for example, which have had among the biggest price spikes.

Catherine Rampell: Why the poor are hurt most by inflation

The administration has struggled with messaging on inflation, including how to celebrate the good economic metrics without sounding tone-deaf about the bad ones. A further complication is that some of the same administration policies that produced better-than-expected job and GDP growth (such as the stimulus bill passed last March) have also contributed to worse-than-expected inflation. If you run the economy “hot,” you get some desirable outcomes and some undesirable outcomes.

Administration officials can argue that the trade-offs of these policy choices have been worth it — and they sometimes do behind closed doors — but they seem reluctant to make this case more publicly.

Some other, more nebulous, factors might also be weighing on consumer sentiment.

In much of the country, covid continues to make daily life — including prosaic activities such as going to work or the supermarket — complicated and wearying. School closures have generally stopped, but child care, always hard to come by, remains in extremely short supply. Take a look at employment in child day-care services, which is nearly 12 percent below its pre-pandemic level:

Wells Fargo economists recently estimated that about half a million families have been stranded without reliable child care, making it harder for parents (especially mothers) to resume their usual economic activities.

It’s quite possible that general exhaustion with the pandemic and its attendant disruptions is coloring how people feel about broader economic conditions. Americans are frustrated that this thing still isn’t over, and they express that frustration by dissing the economy and President Biden’s handling of it. Perhaps that’s one reason the White House has been emphasizing its efforts to get daily life back to “normal” and “prevent economic and educational shutdowns" — alongside its many boasts about job growth.

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