US Economy Adds 49,000 Jobs in January, Unemployment Rate Drops to 6.3 Percent

by John Nelson

WASHINGTON, D.C. — The U.S. economy added 49,000 jobs in January, the U.S. Bureau of Labor Statistics (BLS) reported Friday. Economists surveyed by Dow Jones had expected the report to show a gain of 50,000 jobs, which is a muted expectation compared to Citigroup’s forecast of 250,000 new jobs, according to CNBC.

The unemployment rate fell by 40 basis points to 6.3 percent in January.

There were notable job gains in professional and business services, as well as public and private education in January. However, these gains were offset by losses in leisure and hospitality, health care, transportation, warehousing and in retail trade.

The leisure and hospitality sector took a big hit, losing 61,000 jobs this month, following 536,000 jobs in December. A majority of the losses came in amusements, gambling and recreation (negative 27,000). Employment in food services and drinking places continued to trend down by 19,000 jobs. Since February 2020, employment in leisure and hospitality is down by 3.9 million jobs, or 22.9 percent.

Employment in local government education increased by 49,000, state government education increased by 36,000 and private education increased by 34,000 in January. According to the BLS, pandemic-related employment declines in 2020 in public and private education changed the normal unemployment patterns.

Employment in professional and business services increased by 97,000, with temporary help services accounting for most of the gain. Job growth also occurred in management and technical consulting services, computer systems design and related services and scientific research and development services. Employment in professional and business services is down by 825,000 since February 2020.

Retail trade lost 38,000 jobs in January, but employment is 383,000 lower than in February 2020. The construction sector is down by 256,000 jobs since February.

The change in total nonfarm payroll employment for November 2020 was revised down by 72,000, from a gain of 336,000 to 264,000. Additionally, job losses in December were revised further down from a loss of 140,000 to 227,000.With these revisions by the BLS, the number of jobs created in November and December was 159,000 lower than previously reported.

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