The U.S. economy added a modest 49,000 jobs in January as COVID-19 surges persisted but related business restrictions eased somewhat, kicking off a year that’s expected to bring a pickup in hiring as more Americans are vaccinated.
The unemployment rate, which is calculated from a different survey, fell from 6.7% to 6.3%, mostly because of a big drop in the number of Americans working or looking for jobs, the Labor Department said Friday.
Economists surveyed by Bloomberg had estimated that 70,000 jobs were added last month.
Also disappointing: Total job gains for November and December were revised down by 159,000.
The economy, however, resumed adding jobs after cutting positions in December for the first time since the depths of the pandemic in April. The nation has recovered more than half the 22.2 million jobs wiped out in the health crisis as restaurants, shops and other businesses shut down by the outbreak were allowed to reopen, and the outlets brought back many furloughed workers.
But the rehiring has been interrupted by a virus that has been spiking across most of the country this winter, triggering renewed restrictions on businesses, fewer visits by consumers and hundreds of thousands of layoffs. While many industries have stepped up hiring, restaurants, hotels and arts and entertainment venues have cut hundreds of thousands of jobs in recent months.
In January, the number of Americans on temporary layoff fell by 293,000 as restaurants, shops and businesses recalled some workers. About 27% of unemployed workers said they were on temporary layoff, down from 28% the previous month. That means many workers could still be brought back to their old jobs.
But some furloughs and temporary layoffs are becoming permanent. The ranks of workers permanently laid off rose by 133,000 to 3.5 million, leaving lasting scars in the economy.
Caressa Maltos, 31, of Seattle, Washington, was laid off from both her restaurant jobs in March. One of the eateries brought her back in May at about half her normal hours and pay but laid her off again in November. Even with unemployment benefits, she has dipped into her savings to meet basic expenses and stopped ordering takeout, taking car trips to visit her father and brother, and buying clothing.
She expects to return to her waitressing job when the restaurant reopens in early March, but only for a few weeks. Maltos, who lives with her boyfriend, is due to give birth in early April.
“I’m nervous all the time,” she says. “If we keep closing, will there be a job for me to return to? Are we literally going to be scraping by? I’ve never had a child. I’d like to be able to take my daughter on trips.”
Daily coronavirus cases hit records amid holiday travel and gatherings and colder weather, but hospitalizations have declined recently and some constraints on restaurants and other outlets have eased, Goldman Sachs says.
The number of businesses open and employees working has leveled off in recent weeks after falling for a couple of months, according to Homebase, which provides employee scheduling software.
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