Quill Intelligence LLC CEO and Chief Strategist Danielle DiMartino Booth and Walser Wealth Management President Rebecca Walser on the Fed’s economic policy and raising the minimum wage for President Biden.
The US economy generated 49,000 jobs in January, recovering from a surprising drop in jobs in December, when a slowdown in COVID-19 cases across the country allowed states to ease the blocking measures on companies.
The unemployment rate fell to 6.3% – well below the April peak of 14.7%, but about double the pre-crisis level, the Labor Department said in its monthly payroll report, released Friday. market. Economists consulted by Refinitiv expected the report to show that unemployment remained unchanged at 6.7% and that the economy created 50,000 jobs.
In total, the United States recovered about half of the 22 million jobs lost during the first two months of the pandemic. There are still about 9.9 million more unemployed Americans than in February before the crisis began, the report shows.
After a strong contraction in March and April, the job market recovered quickly, adding 9.3 million jobs in just three months. But since then, job growth has cooled dramatically every month, with economists increasingly warning that the recovery may stabilize – or reverse.
The broader economic recovery has broken out in recent months: unemployment claims, an indicator of layoffs, have remained about four times the level before the crisis. Consumer spending fell because Americans stayed at home – and those who ventured out had limited options. GDP, the broadest measure of goods and services, grew by just 1% in the last three months of the year, compared to an increase of 7.48% between the second and third quarters.
Overall, employers cut 227,000 jobs in December, the Department of Labor said in revised numbers, a sharp drop of 72,000 from the 140,000 initially reported. November gains were also revised downward from 336,000 to 264,000.
“It may take a few months before warmer weather, less COVID-19 and more consumer confidence before consumers run a shopping spree that will provide the real stimulus and job creation,” said Dan North, senior economist at Euler Hermes North America.
Most of the job growth last month occurred in professional and business services, which added 97,000 jobs, with temporary help services accounting for most of the gain. Employment growth also occurred in technical and management consultancy services, which increased by 16,000, computer system projects and related services, up to 11,000, and scientific research and development services, which increased by 10,000.
The gains were partially offset by job losses in services for buildings and homes, which fell by 14,000, and in advertising and related services, which fell by 6,000.
“These data points show that the job market has softened in recent months and the need for fiscal stimulus remains high,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. “We continue to believe that Congress will approve another aid package and, along with the broader economic recovery and the reopening, should support stock markets.”
President Biden and Congressional Democrats are moving forward with an almost $ 2 trillion aid package, which is expected to include $ 160 billion for vaccine distribution, unemployment benefits expanded by $ 400 a week through September, and a third check stimulus amounting to $ 1,400.
Democrats are eyeing mid-March as the deadline for final bill approval, because that’s when supplemental unemployment benefits are about to expire.
This is a developing story. Please check again for updates.