U.S. Economy Added 49,000 Jobs in January, Falling Short of Expectations
Investing.com
Published Feb 05, 2021 08:31AM ET
By Geoffrey Smith
Investing.com -- The U.S. economy added only 49,000 jobs in the month through mid-January, in line with early expectations but well short of the 174,000 reported by private payrolls processor ADP on Wednesday.
The Bureau of Labor Statistics also revised its figures for December to show a net loss of 227,000 jobs, rather than the 140,000 originally reported.
U.S. futures shrugged off the data, Dow Jones Futures losing only 10 points, or less than 0.1%, on the back of the news.
The data come against the backdrop of still-widespread restrictions on businesses, especially in the services sector, as a result of public health measures to stop the spread of Covid-19. As so often already, the main job losses came in the retail and entertainment sectors. General merchandise stores shed 30,000 jobs, eletronics and appliance stores shed 29,000 and amusement parks and casinos shed 27,000. Employment services, a category that covers sectors such as temporary labor, took up the slack with a gain of 62,000.
The numbers come as something of a reality check at the end of a week when investor optimism has been strengthened by the progress of President Joe Biden's $1.9 stimulus package and the Congressional Budget Office's upward revision to its growth forecasts for this year.
"Numbers like these should give you pause before taking too seriously the CBO potential GDP estimates," said David Beckworth, a senior research fellow with the Mercatus think-tank, via Twitter.
Greg Daco, an analyst with Oxford Economics, added that the numbers still mean that nearly 10 million jobs, on a net basis, have been lost since the start of the pandemic.
The unemployment rate fell surprisingly to 6.4% from 6.7%, but analysts noted that even this flattered the underlying dynamic, since some 400,000 people had left the labor force during the month.
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