U.S. Economy Added 49,000 Jobs in January

The U.S. economy added 49,000 jobs in December and the unemployment rate dipped to 6.3 percent, according to data released Friday.

Economists surveyed by Econoday had forecast an addition of 50,000 jobs and a slight rise in the unemployment rate to 6.8 percent.

The estimate for December was revised down significantly, from a loss of 140,000 to a loss of 227,000. This is the third straight month of sluggishness in the labor market.

Job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.

Private sector employment grew by just 6,000. Manufacturing employment shrank by 10,000, much worse than the predicted gain of 30,000. Retail trade employment shrank by 37,800 after expanding by 134,900 in December.

The economy added around 12 million jobs in the second half of 2020, a record-breaking pace after the unprecedented collapse in employment as lockdowns took hold in March and April. The increase in the ranks of employed workers shows that companies ramped up hiring as the economy reopened and consumers came back to stores, restaurants, and other businesses that had been shuttered this spring. Despite the gains, total employment in December was lower than its February level, highlighting just how deep the pandemic cut into what had been the strongest jobs markets in decades.

Hiring slowed in November and layoffs picked back up as infections, hospitalizations, and deaths surged. December saw the first negative print for payrolls since the spring. Many state and local governments around the country announced new restrictions on business, travel, dining, and other activities that have once again suppressed demand and discouraged growth in employment. Some businesses that held on through the first wave of shutdowns have not been able to stay in business in the second wave and much of the government aid made available earlier last year was no longer offered in December.

And even throughout the reopening layoffs have been extremely elevated, indicating that the pandemic’s effects are still ravaging the economy. A separate report on Thursday showed that 779,000 Americans applied for unemployment benefits in the prior week.

Source

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