U.S. Adds Just 49,000 Jobs In January, 'Not Anywhere Close' To Recovering Those Lost

U.S. employers added 49,000 jobs last month, after a pandemic-driven slump in December. Unemployment fell to 6.3%.

Transcript

STEVE INSKEEP, HOST:

There was a modest rebound in the U.S. job growth last month. We got some data this morning showing U.S. employers added 49,000 jobs in January, even though it was one of the deadliest months of the pandemic. NPR chief economics correspondent Scott Horsley joins us as he does on such occasions. Scott, good morning.

SCOTT HORSLEY, BYLINE: Good morning, Steve.

INSKEEP: I guess that's better than losing jobs, but 49,000 is not a big number.

HORSLEY: No. We are moving in a positive direction but at a painfully slow pace. You know, the U.S. economy is still about 10 million jobs shy of where it was before the pandemic. It's recovered just over half the 22 million jobs that were lost last spring. And while January's numbers are certainly an improvement from December's when we were losing jobs, economist Julia Coronado of MacroPolicy Perspectives says there's a really long way to go.

JULIA CORONADO: We're not anywhere close to where we want to be in terms of a healthy labor market. We can't take this recovery for granted. We want to see numbers that are better than that as we come out of this.

HORSLEY: Today's report also showed that the job market in November and December was significantly weaker than initially reported. And even these modest job gains that we're seeing for January may be somewhat exaggerated because of seasonal adjustments.

INSKEEP: What do you mean by exaggerated?

HORSLEY: Well, ordinarily, January's a time when restaurants and retailers and other industries cut workers for seasonal reasons after the busy, you know, holiday period. And the Labor Department tries to smooth that out. This year, they may have overcompensated. And so well, for example, the report says bars and restaurants cut 61,000 jobs last month. The actual cuts may have been even bigger than that.

INSKEEP: Oh.

HORSLEY: And keep in mind, a lot of these service jobs tend to be low paying. So once again, this is an economic downturn that is weighing heaviest on the people who can least afford it.

INSKEEP: OK. So our sense is that service jobs are still doing badly, as you would expect during a pandemic. But what about the rest of the economy?

HORSLEY: You know, it's been more resilient than a lot of people expected early on. Certainly businesses that rely on face-to-face contact, like restaurants and nail salons, have struggled. But a lot of other industries have found ways to work around the pandemic. Congressional forecasters said this week they expect the overall output of the economy will be back to its pre-coronavirus levels by the middle of this year. Coronado says trillions of dollars in federal spending has also made a difference.

CORONADO: You put money in people's pockets, and they found a way to spend a lot of it. They spent it on different things - housing, cars and less services and entertainment and travel. But that really was quite effective in preventing a much, much deeper recession.

HORSLEY: That said, services, entertainment and travel account for a lot of jobs in this economy. And while GDP is expected to bounce back this year, those same congressional forecasters say they don't expect a full employment recovery until 2024.

INSKEEP: Well, that's a long time away. And we are, of course, at least - well, who knows how many months? - a good number of months before the vaccines have completely transformed the pandemic landscape. What can policymakers do in the meantime?

HORSLEY: Well, the Biden administration is already using this report to talk up their proposed $1.9 trillion rescue package. Of course, a group of moderate Senate Republicans have countered with a smaller aid package. One question is how long to extend unemployment benefits. As of mid-January, 18 million people almost were collecting jobless benefits in this country. And we learned yesterday that another 1.1 million people applied for unemployment aid just last week.

INSKEEP: Another huge number. Scott, thanks.

HORSLEY: Good to be with you.

INSKEEP: NPR's Scott Horsley.

(SOUNDBITE OF YO LA TENGO'S "I HEARD YOU LOOKING") Transcript provided by NPR, Copyright NPR.