The Bureau of Labor and Statistics (BLS) reported National unemployment numbers for January 2021. It showed an increase of 49,000 nonfarm jobs. The increase was lower than the expectations projected by Dow Jones Economists of 50,000 jobs and Citigroup projections of 250,000 new jobs.
Sectors showing the largest increase in new hires were Professional Business Services (+97,000), Government (+43,000), and Information (+16,000). The largest decrease in jobs were in Leisure & Hospitality (-61,000), Retail Trade (-37,800), and Healthcare (-30,000). The Leisure and Hospitality industry shed jobs in January after a steep decline in December with a drop of 536,000 when the pandemic surged back, forcing indoor dining and other activities to cease. The industry is still down by 3.9 million jobs when compared to pre-pandemic levels back in February 2020. Retail Trade did lose jobs last month after gaining 135,000 during December’s holiday season. Healthcare is down by 542,000 jobs compared to February 2020 pre-pandemic levels.
Overall, January unemployment fell to 6.3 percent from 6.7 percent in December, but the additional jobs added last month did not significantly impact the decrease in unemployment. January’s unemployment decrease was mainly due to the number of people leaving the job search as 406,000 workers left the labor force. The BLS defines unemployed individuals as “either actively looking for work or on temporary layoff.”
Revised unemployment numbers
Corrections to December unemployment numbers were revised down from -140,000 to -227,000, and November numbers were also revised from +336,000 to +264,000.
January job changes by demographic reported by the BLS show, “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).”
Unemployment highlights by states
December job statistics were reported at the state level by the BLS at the end of January. The largest growth in jobs was reported by Texas with a total increase in December of 64,200 private sector hires. Texas unemployment fell from 8.1 percent in November to 7.2 percent in December. According to the Texas Workforce Commission “In December, the Professional and Business Services industry added 27,000 jobs. The Trade, Transportation, and Utilities industry added 20,100 jobs and Education and Health Services added 6,600 jobs.” The state of Georgia also saw gains in new hires with 44,700 new jobs added in December followed up by North Carolina with 33,600. States with the largest losses in December were Michigan (-64,400) and California (-52,200). Nebraska and South Dakota have the lowest December unemployment rate in the country at 3 percent compared to the national average of 6.7 percent. Nebraska added 6,600 jobs. The states with the highest rates of unemployment were Hawaii (9.3 percent) and Nevada (9.2 percent) whose main industry is highly dependent on tourism and was greatly affected by the pandemic. Although both states have high unemployment, Hawaii added 11,300 jobs and Nevada added 8,200 in December.
States that showed the most significant percent decrease in unemployment were New Jersey (-2.6 percent) and Arkansas (-2.1 percent). December increases in unemployment were reported in Colorado (2.0 percent) and Washington state (1.4 percent).
Congressional Budget Office 2021-2031 outlook
The Congressional Budget Office (CBO) released their economic outlook for 2021 to 2031 and predicted a GDP growth of 3.7 percent in 2021 after a retraction of -2.5 percent in 2020. The CBO’s unemployment forecast will go from 6.8 percent in 2020 to 5.3 percent in 2021 and finally 4.9 percent in 2022.