U.S. Economy Added a Disappointing 49,000 Jobs in January

U.S. Economy Added a Disappointing 49,000 Jobs in January

President Biden made a strong push for his $1.9 trillion Covid relief package in a speech to the nation Friday. His comments came soon after the January employment report showed that the economy added 49,000 jobs last month, with private employers accounting for just 6,000 of the total, a disappointing result that suggests that the recovery is faltering. Additionally, December’s job loss figures were revised downward to 227,000 from the preliminary report of 140,000, indicating the labor market is even weaker than the data had previously indicated.

While the unemployment rate fell four-tenths of a percentage point to 6.3%, much of the reduction was attributed to about 400,000 people dropping out of the workforce, a worrying sign of worsening conditions. And many economists believe the official measure is artificially low. “The headline unemployment rate of 6.3% for Jan likely undercounts the number of out-of-work people in the US, not by design, but by the peculiar circumstances of the pandemic,” Joseph Brusuelas, chief economist at the consulting firm RSM, wrote. “Our estimate implies a real 7.5% rate, which we acknowledge could be much higher closer to 8.5%.”

The number of missing jobs remains enormous, about 9.9 million below the pre-pandemic level. Elise Gould of the Economic Policy Institute notes that the number of missing jobs is actually more than 12 million, if lost job growth over the last 11 months is taken into account.

Biden says jobs numbers support his case: “It’s very clear that our economy is still in trouble,” President Biden said at the White House. “At that rate, it’s going to take 10 years until we hit full employment,” he added. “That’s not hyperbole. That’s a fact.”

Biden reeled off a litany of data points that he said make it clear that the economy needs a significant boost: “[W]e have more than 10 million people out of work, 4 million people have been out of work for six months or longer, and 2.5 million women have been driven from the workforce. Fifteen million Americans are behind in their rental payments. Twenty-four million adults and twelve million children literally don’t have enough food to eat.”

Noting that January was the worst month for the pandemic so far, with more than 100,000 deaths, Biden said that millions of Americans are suffering and in need of immediate assistance: “Are we going to say to millions of Americans who are out of work ... ‘Don’t worry, hang on, things are going to get better?' That’s the Republican answer right now. I can’t in good conscience do that. Too many people in the nation have already suffered for too long. And telling them we don’t have the money to alleviate their suffering, to get to full employment sooner, to vaccinate America after $8 trillion in deficit spending over the past four years — much of it having gone to the wealthiest people in the country — is neither true nor necessary.”