US Jobs Report January 2021: Wages rise less than expected after a larger decline in December

Photographer: George Frey / Bloomberg

The recovery in the US labor market disappointed for a second month in January, with modest job growth, highlighting the persistently difficult outlook for millions of unemployed and calling for more stimulus.

Non-farm payrolls rose just 49,000 after a revised 227,000 drop in December, according to a Labor Department report on Friday. The unemployment rate fell to 6.3%, reflecting an increase in the number of employees and more people who left the workforce.

January data could bolster the case for another significant pandemic aid package. President Joe Biden has proposed a $ 1.9 trillion package, but many Republicans prefer to give up more assistance and wait for the $ 900 billion December aid package to go through the economy.

“Without further assistance, our economy will continue to struggle,” Heather Boushey, a member of the White House Council of Economic Advisers, said in an interview with Bloomberg Television after the report. “We need to continue to act and we need to act so quickly.”

Read more: Tracking Coronavirus Stimulus in the USA

Private wages rose just 6,000 last month, constrained by job cuts in retail, transport and storage, leisure and hospitality, while other industries saw only modest gains. The latest job figures have given a bit in a recent string of stronger economic data, including increased production and housing construction.

At the same time, the report included some highlights. Americans work longer hours, and employment in temporary care services has increased the most in three months, which could foreshadow a takeover in the coming months.

The average number of hours per week rose to 35, the highest figure since 2006. Salaries for temporary assistance services rose by almost 81,000.

The report “shows a labor market that tramples on water,” economists Joseph Song and Alexander Lin of Bank of America Corp. said in a statement. “But there are some signs of the birth of better things to come.”

Median estimates from a Bloomberg poll conducted by economists called for a 105,000 increase in wages and an unemployment rate of 6.7%. Shares rose after the report, the yield on the 10-year treasury bill rose and the dollar fell.

Pandemic-Stricken Year

The economy lost 9.3 million jobs in 2020, according to revised government data.

Business and business restrictions have eased, but fears about more contagious virus variants may reduce consumer activity. Pandemic-sensitive sectors, such as leisure and hospitality, are likely to remain depressed until large-scale vaccinations allow for solid spending on services.

Weak breakdown of industry

• Salaries for leisure / hospitality fell by 61k after falling by 536k in December.
• Health care / social assistance decreased by 40.8k
• Retail trade fell 37.8 k
• Transport / storage decreased by 27.8k after falling by 24.1k
• Production fell by 10,000 in January

“January data raises concerns that weakness that was supposed to be concentrated in sectors such as leisure and hospitality could be more widespread,” Bloomberg economists Carl Riccadonna, Yelena Shulyatyeva and Eliza Winger said in a statement. Note.

When it comes to payment, the average hourly earnings increased by 0.2% compared to the previous month and increased by 5.4% compared to a year earlier. These figures were difficult to interpret during the pandemic, given the magnitude and distribution of job losses and gains.

And as a sign of future challenges, almost 40% of the unemployed have been out of work for 27 weeks or more. That group, known as the long-term unemployed, has changed little since December, by just over 4 million.

Digging deeper

• The unemployment rate would have been 0.6 percentage points higher if misclassified workers were included among the unemployed
• Unemployment rates fell in January for white, Hispanic and black Americans; The unemployment rate has risen for Asian Americans. read more Here
• The participation rate for women aged 25 to 54 was unchanged at 74.8%, still significantly below pre-pandemic levels
• The U-6 rate, also known as the underemployment rate, fell to 11.1% from 11.7%. (Unlike the main unemployment rate – or U-3 rate – U-6 includes those who are employed part-time for economic reasons and those who have stopped looking for a job because they are discouraged by their job prospects )
• The employment diffusion index, a measure of the extent of employment in private industries, fell to 48.1 from 61.9. The January figure is the lowest in April
• Average weekly hours for unsupervised workers rose to 34.4 in January, the longest working week since 2000

– With the assistance of Kristy Scheuble, Sophie Caronello and Jonathan Ferro

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