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The US in January added 49K non-farm payrolls jobs with the resurgence of Covid-19 less than  a forecast 57,000 new jobs. Unemployment is recovering after the Coronavirus hit the economy as people return to work. The unemployment rate fell to  6.3%, however long-term unemployed workers account for an increasingly larger share of the unemployed at 39.5%.

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January 2021 U.S. Employment Report

The Covid-19 virus has wreaked havoc on the global economy. The world's economy was shut down and much of America has stay at home orders. Jobless claims numbers have been records and unfortunately the story is much worse as people have not all been able to return to work. The May through November reports however were a surprise gain in jobs. The expectation had been for more recovery in job losses for December until new lockdowns came into affect and we saw a loss of 140,000 jobs. We rebounded Jan somewhat with 49,000 new jobs,

US Jobs Jan 2021

The market expected the Januaryr report released Friday to show nonfarm payrolls rise with the recovering economy. The ADP report this week showed Private businesses in the US unexpectedly hired 174K workers in January of 2021, compared to market forecasts of an increase of 49K. December had seen  the first decline in private-sector employment since April, amid a rise in COVID-19 infections and further lockdowns. The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50 year low 3.5% with higher participation before the Covid-19 lockdown now to 7.9%.

The concern is that job creation could slow again amid uncertainty with political uncertainty and a rise in Covid-19 cases.

January 2021 US Employment Report Expectations

Employment:

  • Non-farm payrolls  +49,000 vs +55,000 expected, Prior -140,000 (revised to -227,000)
  • Unemployment rate  6.3% v 6.7% expected/prior 6.7%
  • Participation rate 61.4%  vs 61.5% exp 61.5% prior (63.3% highest since 2014)
  • Underemployment rate  11.1% vs 11.7% Exp 11.75% prior
  • Two month net revision -159k Prior +135k +11k +15k, +145k
  • Manufacturing payrolls  -10k vs +26k exp +38k prior
  • Private payrolls  +6 vs +65k exp  -95k prior revised to -204k

Wages:

  • Average hourly earnings 0.2% m/m v  0.2% Expected +0.8% m/m Prior
  • Average hourly earnings  5.4% y/y v 5.1% Prior Expected
  • Average weekly hours  35  v 34.7 Expected/Prior"

 

Household Survey Data

In January, the unemployment rate fell by 0.4 percentage point to 6.3 percent, and the number of unemployed persons decreased to 10.1 million. Although both measures are much lower than their April 2020 highs, they remain well above their pre-pandemic levels in February 2020 (3.5 percent and 5.7 million, respectively).

Among the major worker groups, the unemployment rates declined over the month for adult men (6.0 percent), adult women (6.0 percent), Whites (5.7 percent), and Hispanics (8.6 percent). The jobless rates changed little for teenagers (14.8 percent), Blacks (9.2 percent), and Asians (6.6 percent).  

Among the unemployed, the number of persons on temporary layoff decreased in January to 2.7 million. This measure is down considerably from the recent high of 18.0 million in April but is 2.0 million higher than its February level. The number of permanent job losers, at 3.5 million, changed little in January but is 2.2 million higher than in February. The number of reentrants to the labor force decreased in January to 2.0 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)  

In January, the number of persons jobless less than 5 weeks decreased to 2.3 million. The number of long-term unemployed (those jobless for 27 weeks or more), at 4.0 million, was about unchanged in January and accounted for 39.5 percent of the total unemployed.

After accounting for the annual adjustments to the population controls, both the civilian labor force and the number of employed persons changed little in January. At 61.4 percent, the labor force participation rate was about unchanged over the month but is 1.9 percentage points lower than its February level. The employment-population ratio, at 57.5 percent in January, changed little over the month but is 3.6 percentage points lower than in February.  

The number of persons employed part time for economic reasons, at 6.0 million, changed little in January. This measure is 1.6 million higher than the February level. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.  

The number of persons not in the labor force who currently want a job, at 7.0 million, edged down in January but is 1.9 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.  

The number of persons marginally attached to the labor force, at 1.9 million, decreased in January. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was little changed over the month at 624,000.  

Household Survey Supplemental Data

 In January, the share of employed persons who teleworked because of the coronavirus pandemic edged down to 23.2 percent. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.  

In January, 14.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is 1.1 million lower than in December. Among those who reported in January that they were unable to work because of pandemic-related closures or lost business, 12.7 percent received at least some pay from their employer for the hours not worked, little changed from the previous month.  

Among those not in the labor force in January, 4.7 million persons were prevented from looking for work due to the pandemic; this measure is little changed from December. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.) These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Establishment Survey Data 

 Total nonfarm payroll employment changed little in January (+49,000) but is below its February 2020 level by 9.9 million, or 6.5 percent. In January, notable job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing. (See table B-1. See the note on page 6 and table A for information about the annual benchmark process. See the box note on page 5 for more information about how the establishment survey and its measures were affected by the coronavirus pandemic.)  

In January, employment in professional and business services rose by 97,000, with temporary help services accounting for most of the gain (+81,000). Job growth also occurred in management and technical consulting services (+16,000), computer systems design and related services (+11,000), and scientific research and development services (+10,000). These gains were partially offset by job losses in services to buildings and dwellings (-14,000) and in advertising and related services (-6,000). Since February, employment in professional and business services is down by 825,000.  

In January, employment increased in local government education (+49,000), state government education (+36,000), and private education (+34,000). In both public and private education, pandemicrelated employment declines in 2020 distorted the normal seasonal buildup and layoff patterns. This likely contributed to the job gains in January (after seasonal adjustment). Wholesale trade continued to add jobs in January (+14,000). However, employment in the industry is 263,000 below its February level.  

In January, employment in mining increased by 9,000, with a gain of 8,000 in support activities for mining. Mining employment is down by 133,000 since a recent peak in January 2019, though employment in the industry showed little change for several months prior to the uptick in January. In January, employment in leisure and hospitality declined by 61,000, following a steep decline in December (-536,000). In January, employment edged down in amusements, gambling, and recreation (-27,000) and in accommodation (-18,000). Employment in food services and drinking places continued to trend down (-19,000). Employment in leisure and hospitality fell by 8.2 million during March and April, increased by 4.9 million from May to November, and then declined by 597,000 over the past 2 months.

Since February, employment in leisure and hospitality is down by 3.9 million, or 22.9 percent. Retail trade lost 38,000 jobs in January, after adding 135,000 jobs in December. Over the month, employment declined in general merchandise stores (-38,000), electronics and appliance stores (-29,000), and nonstore retailers (-15,000). These job losses were partially offset by gains in food and beverage stores (+15,000), clothing and clothing accessories stores (+15,000), and health and personal care stores (+14,000). Employment in retail trade is 383,000 lower than in February. Employment in health care declined by 30,000 in January. Within the industry, job losses occurred in nursing care facilities (-19,000), home health care services (-13,000), and community care facilities for the elderly (-7,000). Since February, health care employment is down by 542,000.  

Employment in transportation and warehousing declined by 28,000 in January and is 164,000 lower than in February. In January, job losses occurred in warehousing and storage (-17,000) and in couriers and messengers (-14,000); however, employment in these industries is higher than in February by 97,000 and 137,000, respectively. Employment in air transportation increased by 15,000 over the month but is 105,000 lower than in February.  

Employment in manufacturing changed little over the month (-10,000), following 8 months of growth. Within the industry, durable goods lost 17,000 jobs in January. Employment in manufacturing is up by 803,000 since April but is 582,000 lower than in February. Construction employment changed little over the month (-3,000), after increasing for 8 consecutive months. However, employment in the industry is down by 256,000 since February. In January, employment changed little in other major industries, including information, financial activities, and other services.  

In January, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $29.96. Average hourly earnings of private-sector production and nonsupervisory employees, at $25.18, changed little (+3 cents). The large employment fluctuations over the past several months— especially in industries with lower-paid workers—complicate the analysis of recent trends in average hourly earnings.  

The average workweek for all employees on private nonfarm payrolls increased by 0.3 hour to 35.0 hours in January. In manufacturing, the workweek also increased by 0.3 hour to 40.4 hours, and overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.2 hour to 34.4 hours. 

The change in total nonfarm payroll employment for November was revised down by 72,000, from +336,000 to +264,000, and the change for December was revised down by 87,000, from -140,000 to -227,000. With these revisions, employment in November and December combined was 159,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. The annual benchmark process also contributed to the November and December revisions.)

 The Employment Situation for February is scheduled to be released on Friday, March 5, 2021, at 8:30 a.m. (ET). Coronavirus (COVID-19) Impact on January 2021  

 

January 2021 ADP U.S. Employment Report

 The ADP estimate, done in conjunction with Moody’s Analytics, has varied widely from the government’s official nonfarm payrolls report, particularly during the pandemic. 

Private businesses in the US hired 174K workers in January of 2021, beating market forecasts of an increase of 49K, and recovering from a downwardly revised 78 thousand decline in the previous month.

United States ADP Employment Change

  • The service-providing sector created 156K jobs led by education and health (54K); professional and business (40K); leisure and hospitality (35K); trade, transportation & utilities (16K); other services (10K); and financial activities (1K) while the information sector lost 2K jobs.
  • The goods-producing sector added 19K jobs, due to construction (18K) and manufacturing (1K) while natural resources and mining neither hired or fired people. Private payrolls in midsized companies were up by 84K, small firms by 51K and large companies by 39K. Source: Automatic Data Processing, Inc.

 

Jobless Claims for the week ending January 30 2021

  • Initial jobless claims 779K vs. 830K estimate. Prior week revised down to 812K from 847K
  • Four-week average of initial claims 848.25K vs 849.50K last week
  • Continuing claims 4592K vs. 4700K estimate. Prior week revised up to 4785K from 4771K
  • Previously reported four-week average of continuing claims 4881.75K vs 5001.75K last week.

United States Initial Jobless Claims

  • Pandemic unemployment assistance 7,217,713 vs. 7,343,682 last week
  • 50 states reported 3,603,098 continuing claims for pandemic emergency unemployment compensation benefits vs. 3,893,008 last week
  • The largest increases in initial claims for the week ending January 23 were in Florida (+23,592), Ohio (+7,002), New York (+4,065), Maryland (+2,450), and Arizona (+1,028),
  • The largest decreases were in California (-59,016), Kansas (-8,495), Georgia (-7,896), Pennsylvania (-6,341), and Tennessee (-6,016).

Challenger, Gray & Christmas January Job Cuts Report

  • US January Challenger layoffs 80k vs 77k prior
  • US based employers announced 79,552 job cuts in the first month of 2021, the most for a January month since 2009 and up 3.3% from 77,030 in December.
  • The number is 17.4 percent higher than the 67,735 cuts announced in the same month last year.
  • The most redundances (29,100) were announced in Aerospace/Defense industry which has seen turmoil caused by a downturn in orders for commercial airliners, as travel dried up due to the pandemic.

 United States Challenger Job Cuts

“While cuts were higher than average last month, we are seeing a leveling off of announcements, which may bode well for a recovery in the coming months. Companies may be reassessing their staffing levels and waiting on the impact of the relief bill before making any additional workforce decisions,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

  Challenger Jobs 1 2021

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

 

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

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