WASHINGTON (AP) – U.S. employers created just 49,000 jobs in January, a sign that the virus pandemic is firmly in control of the economy nearly a year after sparking a painful recession.
The lukewarm surge followed a fall of 227,000 jobs in December, the first loss since April. The unemployment rate in January fell sharply from 6.7% to 6.3%, the Ministry of Labor announced on Friday. The biggest drop in unemployment was due to the fact that some unemployed people found work while others stopped looking for work and were no longer considered unemployed.
Friday’s numbers reflect a stalled labor market slowed by a pandemic that is still causing consumers not to travel, shop, dine out, visit entertainment venues and other forms of personal contact. With many employers still downsizing, the pandemic will leave nearly 10 million jobs lost.
Last month, the service industries that deal with customers in person once again saw the largest job losses as millions of consumers continue to settle at home. In the service sector, restaurants, bars and hotels have cut 61,000 jobs. Retailers have shed nearly 38,000 jobs. Employment in transportation and storage fell by 28,000.
Women, who have been disproportionately injured since the spring labor market collapse, have left the workforce to often take care of children who go to school online at home. This pattern continued into January. At the same time, the number of unemployed men has increased over the past month.
As recruitment has slowed, layoffs have continued to rise. The number of applications for unemployment benefits has been falling in recent weeks, but it was still up at 779,000 last week.
The troubles millions of Americans are suffering have fueled President Joe Biden’s call for a $ 1.9 trillion bailout package that includes, for most U.S. residents, $ 1,400 checks and, in addition to state benefits, a would provide $ 400 weekly unemployment benefit. The package would also extend two federal unemployment assistance programs from mid-March to September.
The weak January employment data could give Biden’s package further political impetus. Early Friday, the Senate approved a measure that could allow Democrats to bring Biden’s $ 1.9 trillion plan through the Chamber without Republican support. The measure is now returning to the House, where it must be approved before work on the aid package can begin in several congressional committees.
The harm in the labor market since March has worsened financial inequality in the United States, hurting women and people of particular skin color in particular. At the same time, Americans fortunate enough to keep their jobs saved $ 2.3 trillion – double what it was before the pandemic. This expanded pool of savings could lead to a rapid rebound in spending as business restrictions lift and more Americans become more confident about shopping, dining, and traveling.
Economists increasingly assume that the economy and the labor market will grow much faster than after previous recessions, when vaccinations reach critical mass in the coming months and the government provides further impetus. Bank of America estimates growth could reach 6% this year, which would be the fastest since 1984.
There have been some hopeful signs lately that the economy may recover somewhat. Auto sales rose solidly in January. And a measure of business growth in the service sector hit its highest level in two years. It also showed that service companies added workers in the last month. A separate production measure showed that the factories are also expanding. This also applies to house building.
Some states and municipalities reintroduced restrictions on businesses in December as cases increased. Some of these restrictions were relaxed in January, but may not be in time to affect the employment report, which measures employment in the middle of each month.