The national unemployment rate fell by 0.4 percentage points to 6.3% in January, while nonfarm payroll numbers rose by 49,000—relatively little change from the previous month, according to the U.S. Bureau of Labor Statistics.
The number of unemployed persons has fallen to 10.1 million—by comparison, the number of unemployed persons was 5.7 million, and the unemployment rate 3.5%, in February 2020. Of the major worker groups, unemployment rates fell month-over-month for adult men, adult women, whites, and Hispanics, while unemployment rates changed little for teenagers, Blacks, and Asians.
The number of persons on temporary layoff fell to 2.7 million in January, down from the recent high of 18 million in April 2020 but higher than 700,000 in February 2020. The number of persons jobless for less than five weeks fell to 2.3 million, while the number of long-term unemployed remained relatively unchanged at 4.0 million.
The labor force participation rate remains relatively unchanged at 61.4%, but remains 1.9 percentage points lower than its February level.
“Weakness in sectors reliant on people gathering in close proximity highlights the importance of the efficient distribution of an effective COVID-19 vaccine. Overall, the level of payroll employment is still below its February 2020 peak value by about 6.5%,” says Doug Duncan, chief economist at Fannie Mae. “… The labor force participation rate has fallen 2 percentage points since January 2020, an indication of the high number of people who have stopped searching for work during the pandemic. The number of people on temporary layoff fell slightly in January, while the number of permanent job losers rose, a troubling sign. On the other hand, the number of people working part time but who would prefer full time employment also fell slightly, a positive indicator of labor demand.”
In the Household Survey Supplemental Data for January, the number of employed persons who had teleworked in the last four weeks because of the COVID-19 pandemic fell slightly to 23.2%. At the same time, 14.8 million people reported that they had been unable to work because their employer had closed or lost business due to the pandemic, down 1.1 million from December. Of this number, 12.7% received at least some pay for hours not worked. Of those not in the labor force, 4.7 million were prevented from looking for work as a result of the pandemic.
Total nonfarm payroll employment remains below the February 2020 level by 9.9 million, or 6.5%. Job gains continue in professional and business services, offset by ongoing losses in leisure and hospitality, retail trade, health care, and transportation and warehousing.
“Residential construction jobs continue to impress—with residential construction employment in January at its highest level since 2008. Jobs in residential construction employment increased nearly 2.2% in January relative to one year ago and are now nearly 1% above their pre-pandemic levels in February,” says Odeta Kushi, deputy chief economist at First American. “… This month’s gain of 3,600 residential construction jobs supports further improvement in the pace of home building because building a home does not readily lend itself to outsourcing and automation. It’s very hard to increase housing starts without increasing residential construction employment and productivity. More hammers, more homes.”