The American economic recovery showed new signs of stalling on Friday as government data underscored the pandemic’s brutal damage to the job market.
U.S. employers added 49,000 jobs in January, the Labor Department said, dashing hopes that the new year would bring immediate relief. The private sector added just 6,000 jobs, barely enough to register against the millions of positions lost during the pandemic.
The weak showing was tallied amid a fresh effort in Washington to provide a big infusion of aid to foster a recovery and the data will almost certainly bolster the Democrats’ argument for a robust stimulus package.
“It’s very clear our economy is still in trouble,” President Biden said of the latest reading on the labor market.
Looking to strengthen the recovery, Mr. Biden and congressional Democrats have been pressing for a $1.9 trillion relief measure. By approving budget resolutions in both chambers, Congress cleared the way on Friday to pursue final passage of the package on party-line votes, if needed, within weeks.
Some Republicans have asserted that a smaller package would suffice, and others have said it is too soon for another round of aid.
But far from showing a job market on the mend, the report on Friday provided evidence of a metastasizing crisis. The limited January gains followed an outright setback in December, when the economy lost 227,000 jobs, the first net decline since April and a bigger drop than had been initially reported.
And while the December losses were concentrated in a few pandemic-exposed sectors, the weakness in January was broad-based. Manufacturers, retailers and transportation companies all cut jobs, indicating that the economic damage is spreading.
The unemployment rate fell to 6.3 percent, from 6.7 percent. But the decline came partly because hundreds of thousands of people left the labor force, a sign that the downturn could leave lasting scars. A year earlier, the unemployment rate had been 3.5 percent, a 50-year low. The economy still has nearly 10 million fewer jobs than it did before the pandemic.
“There’s very little to celebrate in this report,” said Julia Pollak, a labor economist for the employment site ZipRecruiter. “Almost every measure that I was hoping would point in the right direction disappointed.”
Still, in returning to growth, even if marginal, the economy avoided a second consecutive month of job losses, a prospect that some economists had feared given the one-two punch of rising coronavirus cases and waning federal aid. Both those forces are now reversing: Coronavirus cases are falling in much of the country, and the $900 billion relief package passed by Congress in December is bringing a measure of help to households and businesses.
Indeed, despite the grim start to the new year, many forecasters predict that the economy will strengthen from here on. In addition to the December stimulus, the vaccination push, though slower than hoped, is paving the way for wider reopenings…