The U.S. economy added 49,000 jobs in January, rebounding from a surprise employment decline in December as a slowdown in COVID-19 cases nationwide allowed states to ease lockdown measures on businesses.
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The unemployment rate edged down to 6.3% — well below the April peak of 14.7%, but about twice the pre-crisis level, the Labor Department said in its monthly payroll report, released Friday. Economists surveyed by Refinitiv expected the report to show that unemployment remained unchanged at 6.7% and the economy added 50,000 jobs.
In total, the U.S. has recovered roughly half of the 22 million jobs lost during the first two months of the pandemic. There are still about 9.9 million more Americans out of work than there were in February before the crisis began.
After a sharp contraction in March and April, the labor market quickly rebounded, adding 9.3 million jobs in the span of just three months. But since then, job growth has cooled dramatically each month, with economists increasingly warning that the recovery could plateau — or reverse itself.
The broader economic recovery has sputtered in recent months: Unemployment claims, a proxy for layoffs, have remained at about four-times their pre-crisis level. Consumer spending fell as Americans stayed home — and those who ventured out had limited options. GDP, the broadest measure of goods and services, grew just 1% in the final three months of the year, compared with an increase of 7.48% between the second and third quarters.
“It may be a few months before warmer weather, less COVID-19, and more consumer confidence before consumers go on a shopping spree which will provide the real stimulus and job creation,” said Dan North, senior economist at Euler Hermes North America.
This a developing story. Please check back for updates.