Job report January 2021
Employment growth returned to the US in January. The number of non-farm workers rose by 49,000 while the unemployment rate fell to 6.3%, the Labor Department said in the Biden government’s first employment report on Friday.
Economists polled by Dow Jones had targeted growth of 50,000 and unchanged unemployment of 6.7%.
The sharp fall in unemployment was recorded even though the activity rate had hardly changed. A broader measure of unemployment, which includes discouraged workers and those working part-time for economic reasons, also fell, falling from 11.7% in December to 11.1%.
While the employment picture remains challenging, 2021 saw a return to earnings after a month-long hiatus in December that saw the first negative number since the rebound began in May.
Millions remain unemployed after companies cut jobs in March and April 2020 to fight the Covid-19 pandemic. More than half of those losses have since been made up, but most sectors remain below their pre-pandemic levels.
The damage has been particularly acute in the hospitality industry as governments across the country have forced hotels, bars and restaurants to either close or operate at reduced capacity to stop the spread of the coronavirus.
The hospitality industry lost another 61,000 jobs in the months after suffering a revised downward exodus of 536,000 in December.
December numbers overall declined, with the month posting a loss of 227,000 from the original estimate of 227,000. November profits have also been revised significantly from 266,000 to 264,000.
Employment gains in January were concentrated in employment and professional services (97,000) and local government training (49,000). Wholesale increased 14,000 while mining increased 9,000.
Retail also saw a 38,000 decline after adding 135,000 during the December shopping season, while healthcare also lost 30,000 jobs. Since February, the last month before the pandemic, the sector has declined 383,000.
Vaccines have given hope that the US economy can run at full speed in the second half of the year, although the months ahead are likely to remain challenging. Gross domestic product contracted 3.5% in 2020 and the outlook for the first quarter, particularly 2021, remains uncertain. Most economic numbers have exceeded expectations, but concerns remain that the virus’s persistence could hurt economic activity earlier in the year.
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