New York (CNN Business)America’s jobs recovery has lost steam: Even though 49,000 jobs were added in January, the nation is still down nearly 10 million jobs since before the pandemic.
Friday’s January jobs report also showed that the unemployment rate fell to 6.3%, beating economists’ expectations, marking the first decrease in two months.
The return of some jobs and a lower unemployment rate are definitely good news. But the US labor market needs great news to get out of this crisis.
“It may look good, but it ain’t,” wrote Gregory Daco, chief US economist at Oxford Economics, adding that the details of the report were a lot less flattering than the headline numbers.
While the unemployment rate decreased, the labor force participation rate inched down ever so slightly, too, leaving a bad aftertaste following the good news.
“I’d like the unemployment rate go down while the labor force is growing,” said Boston College economics professor Robert Murphy.
Friday’s report showed the Bureau of Labor Statistics revised the data for November — when fewer jobs than thought were added, and December — when more jobs than initially reported were lost. December marked the first monthly loss of jobs since April, when the economy ground to a halt.
Since February last year, the economy is still down 9.9 million jobs.
Earlier this week, the Congressional Budget Office predicted that the number of employed workers in the United States won’t return to its pre-pandemic level until 2024.
The January improvements in the labor market weren’t spread evenly across sectors. The leisure and hospitality sector, which is bearing the brunt of job losses in this crisis due to the face-to-face nature of its businesses, lost 61,000 jobs. Over the past two months, nearly 600,000 jobs in the industry were lost.
Retail, health care and transportation and warehousing also saw jobs disappear.
“I don’t see it as a real strong report at all,” Murphy said. “That headline number is not very encouraging. On the private side there was minimal creation.”
Indeed, the private sector as a whole only added 6,000 jobs in January, while the rest of the increase came from jobs added in public education and government.
Trump’s final report card
The January jobs report was based on data collected before President Donald Trump left office, making it the data point that closes the book on Trump’s jobs record.
He is the first president since Herbert Hoover to leave office with fewer jobs than he entered, largely because of pandemic-related job losses.
But even his record for his first 37 months in office wasn’t as strong as Trump often claimed. There were some 6,900 jobs added from January 2017 through February of last year. That’s better than the first 37 months in office for Presidents George W. Bush and Barack Obama, but Obama entered office in the midst of the Great Recession and the economy slipped into another recession shortly after Bush took office. Trump took office during a period of what economists consider full employment.
Trump’s pre-pandemic job gains trailed the gains during the first 37 months of Obama’s second term, or his final 37 months in office. It also trailed gains during the first 37 months of President Bill Clinton’s or Jimmy Carter’s tenure.
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