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The U.S. economy resumed adding back more jobs than it lost in January, as easing stay-in-place restrictions and fiscal stimulus measures out of Washington alleviated some of the pressure on the labor market. However, the number of jobs regained fell short of expectations, and the number of jobs lost in December was revised to be greater than previously reported.
The U.S. Department of Labor released its monthly jobs report Friday morning at 8:30 a.m. ET. Here were the main results expected from the report, compared to consensus estimates compiled by Bloomberg:
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Non-farm payrolls: +49,000 vs. +105,000 expected and a revised -227,000 in December
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Unemployment rate: 6.3% vs. 6.7% expected and 6.7% in December
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Average hourly earnings, month-over-month: 0.2% vs. 0.3% expected and a revised 1.0% in December
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Average hourly earnings, year-over-year: 5.4% vs. 5.0% expected, 5.1% in December
Friday’s reported also reflected downward revisions to the previous two months’ payrolls. November’s non-farm payrolls were revised down by 72,000 to 264,000, and December’s change was revised down by 87,000 to a loss of 227,000 jobs. To that end, some speculated that the jobs report could bolster the case for additional fiscal stimulus to support the virus-stricken economy. President Joe Biden said on Friday that the data warranted a more aggressive Congressional response via virus-relief aid.
And while the unemployment rate unexpectedly declined in January, the drop coincided with a tick lower in the labor force participation rate.
In January, the badly beaten-down restaurant and travel industries shed more jobs, adding to steep December losses. Leisure and hospitality jobs dropped by 61,000 in January, following a plunge of more than 500,000 at the end of last year. That left the leisure and hospitality with a total deficit of more than 4 million jobs since before the pandemic, comprising a significant portion of the nearly 10 million jobs lost on net since February 2019.
Some other industries reversed some recent gains. Retail trade payrolls fell by 37,800 after gaining 134,900 in December around the holidays, and healthcare and social assistance payrolls fell by more than 40,000 after gaining nearly that amount in December. In the goods-producing sector, manufacturing jobs fell by 10,000 after increasing by 31,000 in December.
“The details were weaker than the headline figures suggest. Whereas the downwardly-revised 227,000 fall in payrolls in December was driven entirely by the leisure and hospitality sector, the weakness last month was more widespread,” Andrew Hunter, senior U.S. economist for Capital Economics, wrote in a note Friday.