MNI DATA IMPACT: US Jan Unemployment Rate Lowest Since March

U.S. job growth was slower than expected in January, the Bureau of Labor Statistics reported Friday, but the unemployment rate fell 0.4 percentage points to 6.3%, the lowest since March.

The economy added 49,000 jobs in the first month of 2021, partially recovering from a downward revised 227,000 decline in December, but much slower than the 105,000 increase forecast by the Bloomberg consensus. Some analysts had hoped the nation's vaccine rollout would have injected more optimism into the labor market last month, but others argue that the U.S. immunization push is far too slow, as is the decline in daily Covid case counts.

Even so, the unemployment rate sank by an unexpectedly strong 0.4 percentage points to 6.3% from 6.7% in December. That's the lowest since pandemic-related job loss began in March, when the unemployment rate rose to 4.4% from a half century low.

The number of unemployed persons fell to 10.1 million in January, but it's still almost double its pre-pandemic level of 5.7 million in February. People on temporary layoff declined to 2.7 million, down considerably from 18 million in April. The number of permanent job losers was little changed in January at 2.2 million.

The number of long-term unemployed, or those jobless for six months or more, was roughly unchanged at 4.0 million, accounting for 39.5% of the total unemployed.

PARTICIPATION DIPS SLIGHTLY

The labor force participation rate fell by one tenth to 61.4% from 61.5% in December. That's still 1.9 percentage points lower than February. Meanwhile, the employment-population-ratio in January grew by one-tenth to 57.5%.

Nearly 15 million people reported that they were unable to work in January because their employer had closed or lost business due to the pandemic, 1.1 million fewer than December. Of that statistic, 12.7% said they had received at least some pay from their employer for the hours they did not work.

The U-6 rate, which accounts for discouraged workers, dropped to 11.1 from 11.7 in December. Those marginally attached to the labor force declined to 1.9 million, while discouraged workers, a subset of the marginally attached, was little changed at 624,000.

LEISURE LEADS LOSSES

Total private payrolls were up 6,000 in January when markets had forecast a gain of 163,000. Job loss was mostly concentrated in the leisure and hospitality sector (-61,000), health care and social assistance (-40,800), retail trade (-37,800), and transportation and warehousing (-27,800). Durable goods payrolls were also down 17,000 and manufacturing payrolls sank by 10,000.

Meanwhile, professional and business services jobs were up 97,000 in January, with temporary help services payrolls up 80,900.

Government payrolls rose 43,000 in January following a decline of 23,000 in December.