By Jared Bernstein and Heather Boushey
This morning's jobs report reveals that the pace of job gains has slowed sharply in recent months as the pandemic continues to weigh on job creation, especially in face-to-face services. Strong relief is urgently and quickly needed to control the virus, get vaccine shots in arms, and finally launch a robust, equitable and racially inclusive recovery.
The economy added 49,000 jobs in January after losing 227,000 jobs in December. The three-month trend is weak. After downward revisions to the data for both November and December totaling around 160,000, the economy has added an average of only 29,000 per month. This pace is far below the rate necessary to pull us out of the pandemic jobs deficit-there are about 10 million fewer jobs now relative to February.
While job gains were weak, the unemployment rate fell to 6.3 percent, from 6.7 percent in December. This remains 2.8 percentage points above the rate in February 2020, before the pandemic. However, over this same time period, more than 4 million workers have dropped out of the labor force, disproportionately women.
Today's employment situation release is yet another reminder that our economy remains in a hole worse than the depths of the Great Recession and needs additional relief to ensure that the pandemic can be brought under control, that families and businesses can stay solvent, and that workers can feed their families and keep a roof over their head. This month's data gives us a sense of the scale of relief necessary and the economic costs of inaction.
This need for urgent, sustained action for the duration of this crisis is underscored by a few special questions that the Bureau of Labor Statistics added to its household survey. In January, just under 15 million people reported that they were "unable to work because their employer closed or lost business due to the pandemic." This number has been about the same since October, after falling in the wake of the implementation of the CARES Act from May to September.
