10.1 Million Americans Are Still Unemployed As Rate Ticks Down To 6.3%

The United States added just 49,000 jobs in January, according to data released by the Labor Department Friday—less than half the 100,000 added jobs economists were expecting as the pandemic continues to force layoffs in industries such as retail and hospitality despite gains in white-collar jobs.

The unemployment rate ticked down to 6.3% in January, from 6.7% in December; the metric hit a record high of 14.7% in April.

There are now 10.1 million unemployed people in the United States, compared to 10.7 million in December, the government said; job gains in professional and business services and education helped offset losses in industries including retail, healthcare, transportation, warehousing and hospitality.

Despite the decrease in unemployment, the number of permanent job losers increased to about 3.5 million in January, from 3.3 million in December—about three times prepandemic levels.

Another grim sign of a still-reeling job market, 400,000 Americans left the labor force last month, pushing the labor force participation rate slightly down to about 61.4%.

Of the 7 million people in America who want a job but are not actively seeking employment, about 4.7 million were prevented from looking for work due to the pandemic, the Labor Department said.

January’s report continues to show stark differences in unemployment by race, with minority groups such as Black Americans and Hispanics facing above-average unemployment rates of 9.2% and 8.6%, respectively.

Crucial Quote

“After contracting in December, the labor market returned to growth in January, as some economic lockdowns eased, which allowed more businesses to stay open,” James McDonald, the CEO of Los Angeles-based Hercules Investments said Friday. “While it’s encouraging to see the economy added jobs in January, we are still far away from pre-Covid-19 employment levels.” Overall, there are still 10 million less jobs than there were before the pandemic.

Big Number

17.8 million. That’s how many people were still receiving some form of government unemployment benefit last week—shockingly high compared to the 2.1 million total claims filed in the comparable week in 2020, according to weekly data released Thursday. That’s higher than the number of unemployed Americans, due to a startling number of people who’ve dropped out of the labor force because they’re no longer looking for work.

 

Key Background

The Congressional Budget Office said Monday that it does not expect employment will reach prepandemic levels until 2024–echoing similar estimates from economists predicting that the labor market recovery will severely lag the broader economic recovery in the years to come. Dallas Federal Reserve President Robert S. Kaplan said Thursday that the next two to three months will remain challenging for the economy even though widespread vaccination efforts should help curb some of the downside economic risks of increased Covid-19 infections. 

Tangent

After an all-night session, the Senate narrowly approved a budget resolution Friday morning that will allow Democrats to move forward on President Joe Biden’s lofty $1.9 trillion stimulus proposal without any Republican backing. It’s likely the package will need to be trimmed down to satisfy some of the more conservative Democrats, but experts, including Vital Knowledge Media Founder Adam Crisafulli, still estimate the resulting bill could total as much as $1.7 trillion and hit President Biden’s desk before the current enhanced federal unemployment benefits expire on March 14. Biden’s plan extends the enhanced benefits of $400 per week through September.

Further Reading

Senate Approves Budget Resolution Paving The Way For Biden’s $1.9 Trillion Stimulus Plan (Forbes)

Another 779,000 Americans Filed For Unemployment Last Week (Forbes) Follow me on Twitter. Send me a secure tip

Jonathan Ponciano

Jonathan Ponciano

I’m a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism and economics while working for UNC’s Kenan-Flagler Business School as a marketing and communications assistant. Before Forbes, I spent a summer reporting on the L.A. private sector for Los Angeles Business Journal and wrote about publicly traded North Carolina companies for NC Business News Wire. Reach out at jponciano@forbes.com.

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NBC News 5.13M subscribers NBC News’ Steve Patterson shares the stories of Kanisha Mayweather, Stacy Davis and Victor Patterson — three of the millions of unemployed Americans who have faced the pandemic with faith and perseverance since March.» Subscribe to NBC News: http://nbcnews.to/SubscribeToNBC​ » Watch more NBC video: http://bit.ly/MoreNBCNews​ NBC News is a leading source of global news and information. Here you will find clips from NBC Nightly News, Meet The Press, and original digital videos. Subscribe to our channel for news stories, technology, politics, health, entertainment, science, business, and exclusive NBC investigations. Connect with NBC News Online! Visit NBCNews.Com: http://nbcnews.to/ReadNBC​ Find NBC News on Facebook: http://nbcnews.to/LikeNBC​ Follow NBC News on Twitter: http://nbcnews.to/FollowNBC​ Follow NBC News on Instagram: http://nbcnews.to/InstaNBC​ Unemployed Americans Still Struggling During pandemic: ‘I Do A Lot Of Praying’ | NBC Nightly News

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