The American economy produced little relief last month as the winter pandemic surge continued to stymie a rebound in the labor market. The weak showing comes in the midst of a fresh effort in Washington to provide a big infusion of aid to foster a recovery.
U.S. employers added 49,000 jobs in January, the Labor Department said Friday. The number reflected a disappointing month of hiring even as it provided hope of renewed economic momentum.
The unemployment rate fell to 6.3 percent, from 6.7 percent.
President Biden, speaking later at the White House, referred to the jobs data in laying out a case for his $1.9 trillion economic relief proposal. “It’s very clear our economy is still in trouble,” he said. “A lot of folks are losing hope.”
The limited January gains followed an outright setback in December, when the economy shed jobs for the first time since April. December’s loss, originally stated at 140,000, was revised on Friday to 227,000. The gain for November was revised from 336,000 to 264,000.
There was a small victory in avoiding a second consecutive month of job losses, a prospect that some economists had feared given the one-two punch of rising coronavirus cases and waning federal aid.
Feb. 5, 2021, 4:14 p.m. ET
“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.
But Mr. Bunker said the gains were nothing to celebrate. The economy still has more than nine million fewer jobs than it did before the pandemic, and progress has slowed significantly since the summer. Unlike in December, when job losses were concentrated in a few pandemic-exposed sectors, the weakness in January was broad-based, with manufacturers, retailers and transportation companies all cutting jobs.
“It’s not clear that this one month assuages those concerns,” he said. “A hundred thousand here, a hundred thousand there is steady progress, but it’s not the sort of gains we need to see.”
Mr. Biden’s relief proposal took a step toward congressional approval early Friday when the Senate narrowly passed a budget resolution that will next go to the House, where Democrats will not need Republican support to approve it.
Some Republicans have said a smaller package would suffice, and others have said it is too soon for another round of aid.
Nearly a year after the pandemic devastated the job market, many forecasters predict that the economy will strengthen from here on. The $900 billion federal relief package enacted in December is expected to bolster the economy, with more aid potentially on the way. The vaccination push, though slower than hoped, is paving the way for wider reopenings even as coronavirus mutations around the world make the rollout more urgent.
“There should be a tailwind at the economy’s back,” said Julia Pollak, a labor economist at the online job site ZipRecruiter. “We’ll need all the tailwinds we can get.”
But the winter slowdown could leave lasting wounds. Though the economy has regained more than half of the 22 million jobs lost last spring, millions of people have been unemployed for a long period — potentially making it harder to rejoin the work force — or are no longer classified as unemployed because they have stopped looking for a job.
“It is difficult on a monthly basis to really see what the long-term impacts will be,” said Daniel Zhao, an economist with the career site Glassdoor. “But certainly the long-term economic scarring is something that is a huge concern for the recovery.”