The economy gained just 49,000 jobs in January, as recover sputters amid pressure from virus
The January data, released by the Bureau of Labor Statistics, is yet another reminder of how much ground the labor market still needs to regain to return to pre-pandemic levels.
The country has recovered just over half of the 22 million jobs lost between February and April, but the economic recovery has flatlined in recent months.
The report was marked by continued job loss in the leisure and hospitality industry, which shed 61,000 jobs, as layoffs hit amusement and gambling businesses, hotels, restaurants and bars.
Retailers lost another 38,000 jobs, after an uptick during the holiday season. Health care facilities lost 30,000 jobs; transportation and warehousing, 28,000.
“There’s no way to construe that this was not a weak jobs report,” said Joe Brusuelas, chief economist at the firm RSM.
The report also showed that the labor market was weaker late last year than initially estimated. There were 72,000 fewer jobs created in November than originally reported. In December, the U.S. lost 227,000 jobs rather than the 140,000 initially estimated.
Even a lone bright spot on the report came with an asterisk: 97,000 jobs were added in the professional and business services sector, but 81,000 of those were temporary.
The report comes as Democrats move closer to passing President Biden’s $1.9 trillion stimulus plan. The proposal would extend unemployment benefits through September, as well as provide a $1,400 stimulus checks for many Americans. It would also raise the minimum wage, increase the child tax credit, provide rental assistance and money for nutrition programs, while setting aside hundreds of millions of dollars in aid to state and local governments.
Brusuelas said the weak numbers should put a rest to questions about whether such an ambitious package is necessary.
“This is not going to give confidence to policy makers that they can tap dance around the conditions of the three lower quintiles of U.S. households where the unemployment is likely around 20 percent,” he said.
The economy only grew by a paltry 1 percent in the last last three months of 2020, according to last week’s Bureau of Economic Analysis figures.
Coronavirus cases have recently started trending down after the deadliest month so far during the pandemic, although concern remains about the threats posed by the new variants.
The report, which was based off data gathered in the first half of January, makes for the last of for former President Trump’s tenure. According to BLS data, the U.S. economy ended with about 2.1 million less jobs than when he took office in 2017.
