After several months of steady job growth, the winter season came in with renewed COVID-19 challenges and hindered economic recovery. In January, nonfarm payroll employment gained back just 49,000 of the 227,000 jobs lost in December, according to the latest report from the Bureau of Labor Statistics. (December’s job loss data were revised in the January report.)
The unemployment rate dropped by 0.4% in January, from 6.7% to 6.3%, bringing the total number of jobless Americans down to 10.1 million. But it will take another 10 million jobs to reach pre-pandemic status (February 2020).
Lower unemployment coupled with lower participation
The number of long-term unemployed persons (unemployed for six months or more) remained at 4.0 million, or 39.5% of total unemployed, in January. But there was a notable decline among those who recently became unemployed (less than five weeks) — from 2.9 million to 2.3 million.
About 7.0 million Americans are not currently in the labor force but actively seeking a job, down from 7.3 million in December. And the labor participation rate inched downward, from 61.5% to 61.4%.
Telework continues to offer a solution to health and safety concerns, though the number of those teleworking due to the pandemic dropped slightly in January to 23.2%. Nearly 14.8 million were unable to work last month because of business shutdowns, and 4.7 million people couldn’t find work because of the pandemic.
Unemployment rates down for almost all groups
Unemployment rates generally improved across different racial, age, and gender demographics in January:
- Adult men: 6.0% (6.4% in December)
- Adult women: 6.0% (6.3% in December)
- Teenagers: 14.8% (16% in December)
- Black/African American: 9.2% (9.9% in December)
- Hispanic/Latino: 8.6% (9.3% in December)
- Asian: 6.6% (5.9% in December)
- White: 5.7% (6.0% in December)
Job growth driven by temporary help and educational employment
After gaining 156,000 jobs in December, professional and business services employment again led the way for growth in January. The industry added 97,000 jobs last month, 81,000 of which were in temporary help services.
Educational jobs also jumped in January — with 49,000 jobs added in local government education, 36,000 in state government education, and 34,000 in private education. Smaller gains included 14,000 jobs in wholesale trade and 9,000 in mining.
The leisure and hospitality sector lost 61,000 jobs in January, following December’s 536,000 drop. Retail trade, which bounced back by 135,000 jobs in December, lost 38,000 jobs in January. Health care lost 30,000 jobs in January, or nearly 75% of the jobs it gained in December. And transportation and warehousing employment fell by 28,000.
While declining unemployment rates and job growth in January are steps in the right direction, the slow improvement means it could take years to recover fully. The Congressional Budget Office projects that the number of people employed won’t return to pre-pandemic levels until 2024.
