Taking hope in hand seemed to be the name of the game for the January Jobs Report as some economists and bankers looked for the best in the 48,000 jobs created as shown by the US Labor Department on Friday. But, while they welcomed the gains, miniscule as they were, in the overall picture since the baseline of February of last year, the overall issues facing American lives mitigated whatever hope that the report might have shown.
The unemployment rate dropped from 6.7 percent in December to 6.3 in January.
“It is a positive sign that we got over those speed bumps and the wheels haven’t completely come off the car,” said Nick Bunker, head of research for the job site Indeed,” to The New York Times.
Some economists had predicted a gain of 100,000 jobs, with a point plus or minus in the jobless rate but these hopes were dashed, despite the looming vaccination rate for Covid; and, a relaxation of some public health restrictions, in certain areas of the country.
Some optimism is expected, along with a rebound, when the so-called herd immunity is achieved, when enough Americans are vaccinated, but with many people still reluctant to take the vaccine, (and a shorter supply of the vaccine itself), this may be more hoped for, than a forthcoming reality.
Continuing the downward trajectory of retail, 38,000 jobs lost, as well as healthcare with 30,000 gone, the path to recovery, at least with January, that goal seems long off.
“There's no way to construe that this was not a weak jobs report,” said John Brusuelas, chief economist at the firm RSM, reported The Washington Post.
They also noted that the increase of 97,000 jobs added to the professional and business services sector (a catch all category) was mitigated when it was revealed that “81,000 of those were temporary.”
With only 1 percent growth in the last quarter of 2020, and “data gathered in the first half of January, makes for the last of President Donald Trump’s tenure.”
Most importantly the nation has not recovered nearly 10 million of the nearly 20 million plus jobs that were lost due to the pandemic. The Washington Post estimated “at this anemic rate of growth, it would need more than 16 years to earn those jobs back.”
Significantly, the labor force participation rate stayed about the same at 61.4 percent from December and down 63.3 percent from February's 2020 baseline, and while holding steady says, to many observers, that there is greater weakness in the labor market than many of them would care to acknowledge. And, with 81.1 percent in January, measured against the baseline from last February, a seesaw pattern can be seen, with “79.8 percent during the worst part of the pandemic,” added the Times.
Standing outside of the banner unemployment rate, “Economists and policymakers are closely watching measures of labor force attachment to gauge how far the job market is from full recovery. After the 2007-9 recession, participation for workers in their prime unexpectedly rebounded as some who were believed to have permanently dropped out of the job market began to look for jobs or take open positions,” they concluded.
Taking a wide shot of the data, it’s easy to agree with The Wall Street Journal that “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.”
With help from the White House, President Joe Biden relief may be coming sooner than thought, as he keeps a campaign promise, with a $1,9 billion relief package that includes $1,400 checks, and monies to state and local governments, something that has faced Republican opposition since the previous administration, but that may be needed to stem the revenue loss due to Covid and help open public schools to in person learning.
Using a process of budget reconciliation, Biden’s actions, say his supporters, are responding to critical care for families and individuals, especially for low wage service workers, facing further job loss, wage erosion, and the threat of eviction, in what is promising to be a very cold winter.
He told reporters, “This is about people’s lives. This is not just about numbers,” and “they are really hurting. Just look at all the number of people who are needing and seeking mental health help.”
“This jobs report suggests signs of a nascent overall recovery, but food insecurity, costs of caregiving, persistently high unemployment, and small business stagnation necessitate emergency relief that targets those being left behind — especially women, people of color, and lower income workers,” said Nicole Goldin, nonresident senior fellow at the Atlantic Council,” reported The Hill.
With the House passing the relief bill, it’s now time for the Senate to help try to right the course of the American economy, time and money are of the essence.
