Employment Situation Report – January 2021
Total nonfarm payroll employment improved slightly in January as robust gains in professional and business services were offset somewhat by declines in leisure and hospitality and in retail trade sectors. The January job gain of 49,000 was in-line with most analysts’ expectations and represented an improvement over the weak December Bureau of Labor Statistics (BLS) report. Unemployment rate fell by 0.4 percentage point to 6.3% in January or 10.1 million unemployed persons.
The BLS noted the labor market continued to reflect the impact of the coronavirus pandemic and efforts to contain it. However, the data suggests that the impact of the virus might be lessening; the sharp rate of decline in the large leisure and hospitality sector moderated as government mandated restrictions eased during January.
Congress is considering as much as $1.9 trillion in additional financial aid to help households and businesses. The proposal would bolster unemployment aid, provide funds for vaccine distribution, and send $1,400 checks to many Americans.
The BLS reported that in January, 23.2 percent of employed persons teleworked because of the coronavirus pandemic, slightly below December rates. These data refer to employed persons who teleworked or worked at home for pay at some point in the last four weeks specifically due to the pandemic.
As reported by the BLS, in January employment in professional and business services rose by 97,000, with temporary help services accounting for most of the gain (+81,000). Job growth also occurred in management and technical consulting services (+16,000), computer systems design and related services (+11,000), and scientific research and development services (+10,000). These gains were partially offset by job losses in services to buildings and dwellings and in advertising and related services.
Employment increased in local government education (+49,000), state government education (+36,000), and private education (+34,000). The BLS noted that in both public and private education, pandemic-related employment declines in 2020 distorted the normal seasonal buildup and layoff patterns. This likely contributed to the job gains in January.
Wholesale trade continued to add jobs in January (+14,000) as did mining with a gain of 9,000 jobs.
As previously noted, employment in leisure and hospitality declined by 61,000, following a steep decline in December (-536,000). In January, employment edged down in amusements, gambling, and recreation (-27,000) and in accommodation (-18,000). Employment in food services and drinking places was down (-19,000).
Retail trade lost 38,000 jobs in January, after adding 135,000 jobs in December.
Employment in healthcare, transportation and warehousing, manufacturing, and construction changed little versus the prior month as did jobs in other major industries, including information, financial activities, and other services.
In spite of the small gains reflected in January, PrincetonOne is seeing signs of improvement. Many of our clients are optimistic that the economy will continue to reopen as more Americans receive the vaccine and the pandemic recedes. And, candidates are more ready than ever to rejoin the labor force now that a safer environment is on the horizon.
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