Skip to main content

U.S. January Jobs Growth Disappoints As Payrolls Rise 49,000

The January jobs report suggests a sluggish start to the year in terms of employment growth, with a smaller-than-expected 49,000 new positions added in the world's largest economy.

The U.S. economy added fewer-than-expected new jobs last month as private sector employment continues to lag forecasts amid pandemic-linked shutdowns for businesses and factories.

A net 49,000 new jobs were created in January, the Labor Department, said, up from December's upwardly-revised total of a 95,000 loss. Estimates for the January tally were uncommonly large, but the 49,000 figure sits mostly below Street forecasts and signals a poor start to employment growth to start the year. 

The headline jobless rate slipped to 6.3%, the lowest since March, while the labor force participation rate slipped to 61.4%. However, that still leaves the U.S. economy some 9.89 million jobs lower than its pre-pandemic peak in February of last year.

"Any job growth is good news, especially when flying into the teeth of a storm like the US economy is doing now. But at the current pace it would take years to recover what was lost in 2020 and that assumes no virus variants or vaccine supply chain problems complicate the course of the pandemic," said Josh Lipsky, director of the GeoEconomics Center at the Atlantic Council. "So today’s data underscores the need for more fiscal relief. Even though the US has already committed close to 16% of GDP on an economic rescue the numbers tell us it is simply not enough."

Scroll to Continue

TheStreet Recommends

A late-hour vote by the Senate, which allows Democratic lawmakers in the upper chamber to pass President Joe Biden's $1.9 trillion stimulus bill without Republican support.

A separate Labor Department report said Thursday that new jobless claims for the week ending January 16 fell to 779,000, the lowest in more than two months, but noted that still left 17.8 million Americans were receiving some form of unemployment benefits.

Payroll processing firm ADP, meanwhile, said Wednesday in its National Employment report that private employers added a much stronger-than-expected 174,000 new jobs over the first month of the year. 

Wall Street futures held onto early gains following the release, with contracts tied to the Dow Jones Industrial Average priced for a 150 point opening bell gain and those linked to the S&P 500, which is up 4% for the week, indicating a 16 point advance. Nasdaq Composite futures are looking for a 50 point move to the upside.

The U.S. dollar index eased from its recent three months highs in overnight trading, but was still marked at an elevated 91.30 against a basket of its global peers, which benchmark 10-year Treasury note yields hit a three-week high of 1.182%.