U.S. Employers Added 49,000 Jobs in January

U.S. employers resumed hiring in January, putting the labor market back into growth mode, but the weak pace of job gains suggested a long road remains for the recovery.

The U.S. economy added 49,000 jobs last month. The small January gain came after payrolls fell steeply in December, the first decline since the coronavirus pandemic triggered business shutdowns last spring. The unemployment rate fell to 6.3{c25493dcd731343503a084f08c3848bd69f9f2f05db01633325a3fd40d9cc7a1} in January from 6.7{c25493dcd731343503a084f08c3848bd69f9f2f05db01633325a3fd40d9cc7a1} a month earlier, in part reflecting fewer people searching for jobs.

“The recovery is only stumbling along at this point,” Sarah House, senior economist at Wells Fargo Securities, said. “Yes, we managed to eke out a gain, but we’re still 9.9 million jobs shy of where we were back in February.”

Jobs grew strongly in business and professional services, mainly in temporary help roles, the Labor Department said in its January report on U.S. employment. Many sectors, though, lost jobs last month. The leisure and hospitality sector lost 61,000 jobs in January, following a steep decline of 536,000 in December. Retailers and warehouses cut jobs in January after adding jobs strongly over the holidays.

The unemployment rate decline in January was driven by two factors. More people dropped out of the labor force—meaning they weren’t actively looking for a job and may have grown frustrated with their employment prospects. Also, the number of people reporting themselves as employed increased, consistent with a generally upward trend in hiring since last spring.

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