February Employment Outlook
As job market recovery stalled last month, all eyes have been focused on the future to uncover if December marked the end of the steady employment gains we had seen from May through November 2020.
Thankfully, the unemployment rate continued its downward trend in January, moving to 6.3% from December’s 6.7%. While a small win - we were seeing much larger drops throughout most of 2020 to show job recovery during the summer and fall - it is reassuring to be back on the trajectory of job growth. Notably, however, some of the industries that thrived throughout the past year, like transportation and warehousing, seem to have hit a bit of a roadblock.
The latest Bureau of Labor Statistics news release on Friday, February 5th, offers a look into the industries and groups that had the greatest growth and losses in the month of January. Check out a few of our key takeaways below or scroll down for a quick look at the numbers in our monthly infographic.
- Job gains in January were lackluster at best. This past November, we noted the slowest month in employment recovery since the start of the pandemic - just a 0.2% dip in unemployment. Then in December, the unemployment rate sat stagnant at 6.7%. While we’re excited to see economic progress in January with the decrease to 6.3% unemployment, these small numbers indicate a huge slowdown. In previous months, we’ve cited greater COVID-19 restrictions on leisure activities and businesses as the cause for low numbers. Yet many states are starting to see lower rates of spread now that vaccines are rolling out (though more slowly than anticipated). Whether this 0.4% change in the unemployment rate is indicative of slow, bumpy growth or simply the starting point for greater job growth numbers remains to be seen.
- Temporary help services account for much of January’s job gains. Added jobs in the professional and business services sector (+97,000 jobs) offset losses elsewhere, with the temporary help services sector making up the majority of the gains (+81,000). For us, this is no big surprise. Many companies looking to have more flexibility in their workforces post-COVID are leaning on temporary employees to help them meet productivity goals without adding costly overhead. We’ll be surprised if gains in this sector don’t continue throughout 2021.
- The transportation and warehousing sector had its first losses since April. This industry has held strong gains throughout the pandemic, as warehousing and distribution have become some of the most important parts of every business. In a surprise this month, and for the first time since April, employment in transportation and warehousing decreased. The losses, 28,000 jobs in total, included 17,000 jobs lost in warehousing and storage specifically.
- Industries that rely on traditional hourly workers are still struggling. Together, the leisure and hospitality industry and retail industry lost nearly 100,000 jobs in January. For retail, this was a reversal - a portion of the jobs added during the holiday season (+135,000 in December alone) - were lost. In leisure and hospitality, this was part of a greater decline that includes a loss of 61,000 jobs in January and 536,000 jobs in December. These have been some of the hardest hit industries in the past 9 months, and leisure and hospitality is still down by 3.9 million jobs compared to February 2020.
Learn more from the infographic below:
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