WASHINGTON—Non-farm payrolls increased 49,000 in January, with the unemployment rate decreasing to 6.3%, according to new data from the Bureau of Labor Statistics.
The numbers aren’t quite as rosy as they seem, with NAFCU Chief Economist and Vice President of Research Curt Long noting the decline in the unemployment rate "partly reflects a drop in labor force participation."
Of note, the December non-farm payrolls rate was revised down to a loss of 227,000.
"Restaurant and hotel employment dropped by 38,000 during the month. Retail sector employment fell by the same amount, reversing gains from the prior month," said Long. "January tends to be a month with large swings as employers shed seasonal employees following the close of the holiday shopping season.
"The drop in unadjusted employment last month was actually 2.8 million, with seasonal adjustments papering over most of those losses," continued Long. "The good news is that COVID cases are in retreat, and vaccine distribution is accelerating. But there is still a long road ahead to full employment, and the case for more fiscal stimulus got a bit stronger with today’s release."
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Average hourly earnings rose six cents in January, with year-over-year wage growth reaching 5.4%.
The labor force participation rate remained at 61.4%, significantly down from 63.3% in February 2020. Results among the major industries were lopsided, with big losses in hospitality and retail offset by education and professional services.
Public and private education gained 119,000 jobs, followed by professional and business services (+97,000), most of which was temporary accounting help. Leisure and hospitality fell by 61,000 jobs while retail trade lost 38,000 jobs, Long said.