Employers added just 49,000 jobs in January and 89,000 jobs over the past three months as several industries reported significant declines and remain substantially below their pre-pandemic levels. However, faster growth is forecast for the remainder of the year.
Since May, the economy has recovered only 56% of the jobs lost in March and April. The Congressional Budget Office (CBO) estimates it will take two more years (2023) to recover the lost jobs.
Permanent impact of COVID-19 remains high: 42% of the unemployed have permanently lost their jobs compared to 11% in April 2020.
Over 5.6 million Americans have dropped out of the labor force over the past year, with 2.0 million of that group reporting they want a job and would return—just 57.5% of the population is employed.
In January, employment declined in retail trade (-37,800), accommodation and food services (-37,700), health care (-29,600), transportation and warehousing (-27,800), federal government (-24,000), social assistance (-11,200) and manufacturing (-10,000).
Long recovery or light at the end of the pandemic tunnel? As the latest wave of COVID-19 cases begins to subside, the number of vaccinations increases, and Congress pours another $1.9 trillion into the economy, the pace of economic growth is forecast to accelerate though the rest of 2021. CBO estimates employment will grow an average one million per month this spring and 666,000 jobs per month this summer. Only another pandemic set-back or unforeseen international crisis could derail faster growth at this point.
