U.S. hiring slows in January

The U.S. economy added fewer jobs in January compared to the previous month.

Total payroll employment increased by just 49,000 in January, the U.S. Bureau of Labor Statistics reported today. The unemployment rated decreased mildly, falling just 0.4% to 6.3%.

But payroll employment for November was revised down by 72,000, from an increase of 336,000 to an increase of 264,000, and the change for December was revised down by 87,000, from decrease of 140,000 to decrease of 227,000. 

With these revisions, employment in November and December combined was 159,000 lower than previously reported.

“The overall job market is still weak, with only 49,000 net new job creations in January following a 227,000 net loss in December,” said Lawrence Yun, chief economist of the National Association of Realtors. “The very first stimulus from last spring is dwindling and virus cases are rising.”

Yun said about 10 million jobs are still needed to get us back to pre-pandemic levels. 

“Thankfully, the late December stimulus package, including the $600 check to most Americans, should help with job growth soon,” he said. 

Retail trade lost 38,000 jobs in January, after adding 135,000 jobs in December. Employment in retail trade is 383,000 lower than in February 2020.

Employment in manufacturing declined by 10,000 jobs, following 8  months of growth. Within the industry, durable goods lost 17,000 jobs in January. Manufacturing is up by 803,000 since April but is 582,000 lower than in February 2020.

Construction employment changed little over the month, down by 3,000 positions, after increasing for 8 consecutive months. Employment in the construction industry is down by 256,000 since February.

In January, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $29.96. Average hourly earnings of private-sector production and nonsupervisory employees, at $25.18, changed little (+3 cents).

The average workweek for all employees on private nonfarm payrolls increased by 0.3 hours to 35.0 hours in January. 

In manufacturing, the workweek also increased by 0.3 hours to 40.4 hours, and overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.2 hour to 34.4 hours.

Accelerated job growth could be on the way, however, according to Yun.

“By summer, around half of Americans could be vaccinated and another quarter by autumn,” Yun said. “Herd immunity is in sight, and a possible return to normal everyday activity. Given the massive savings of stimulus money to date, the unleashing of that into spending will greatly boost job recovery in the second half of the year.”

The full Employment Situation Report for January 2021 is available here.