The U.S. economy saw jobs grow in January, but analysis of changes in employment across industries shows that the job market is still grappling with the effects of the coronavirus pandemic.
The Labor Department reported Friday that the total number of non-farm workers rose by 49,000 in the last month. This is an anemic start to the year as recreational and hospitality employers continued to downsize during the winter season. The unemployment rate fell to 6.3%.
The slight increase in total employment was just below the economists’ forecast profit of 50,000 and came after the net loss in December.
CNBC examined the net industry change for jobs in January based on the data included in the Employment Report.
The leisure and hospitality sectors again posted the worst decline, losing 61,000 jobs. In contrast to December, however, the sector’s losses in January were more evenly distributed across the sub-industries.
Restaurants and bars have shed 19,400 jobs while hotels, resorts and other accommodation businesses have lost 18,300. The gambling and leisure industry has cut 26,900 jobs.
The loss of 61,000 across the entire Recreation and Hospitality sector, while the worst of any industry for the month, was a huge improvement on the 536,000 job loss in December.
“Employment in food and drink bars continued to decline,” said the Ministry of Labor in a press release. “Leisure and hospitality employment declined 8.2 million in March and April, rose 4.9 million from May to November, and declined 597,000 in the last two months.”
“Since February, employment in leisure and hospitality has fallen by 3.9 million, or 22.9 percent,” the government report said.
Restaurants across the country have downsized as colder weather keeps diners away from outdoor dining or forces restaurants to operate indoor restaurants with limited capacity to slow the spread of Covid-19.
The health and welfare sector also had a difficult month with job losses in care facilities (-19,000), home health services (-13,000), and community care facilities for the elderly (-7,000). Since February, healthcare employment has fallen by 542,000.
The sector posted a decrease of 40,800 positions.
People sit at a table outside a restaurant during the coronavirus disease (COVID-19) pandemic in the Manhattan neighborhood of New York on December 11, 2020.
Carlo Allegri | Reuters
“The net network … not a large number, but still in line with a low point in the labor market data. We can also see that in the claims”, wrote Dennis DeBusschere, ISI strategist at Evercore. “Besides, Jan is a terrible month for payrolls. Lots of seasonality in the number … so keep that in mind.”
These losses were partially offset by healthy attitudes in the professional and corporate sectors as well as in government circles.
Professional and business services, a broad sector encompassing a wide range of workers, grew by a hefty 97,000 in January.
In the past month, there has been a surge in recruitment from computer systems designers (11,300) and consultants (16,100), as well as decent increases in scientists working in research and development units (10,000) across the country.
The headline of 97,000 also contained a spate of hiring among temporary workers. Although technically these employees are employed by a temporary employment agency or service, they are often temporarily assigned to other companies to supplement the company’s workforce.
The sub-industry for temporary workers created 80,900 jobs in January.
The government also saw a solid increase in hiring with a net profit of 43,000. The Department of Labor said local government education (like public high schools) increased by 49,000 while state government education (like public universities) increased by 36,000.
– – CNBC’s Nate Rattner and Crystal Mercedes contributed to the coverage.