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New jobs report reinforces need for COVID relief package

There was some speculation that if the job totals were robust, it might weaken support for a robust COVID relief package. That's now a moot point.

Expectations headed into this morning showed projections of about 50,000 new jobs added in the United States in January. As it turns out, according to the new report from the Bureau of Labor Statistics, those projections were right on the money.

The economy added a meager 49,000 jobs in January and the unemployment fell slightly from 6.7 percent to 6.3 percent, signaling the ongoing fragility of the labor market recovery.... "That isn't going to do much to hammer away at this huge pool of unemployed," said Mark Hamrick, senior economic analyst at Bankrate. "I think we're still in the dark days of winter with respect to the pandemic and the economy."

As we discussed a month ago, the trajectory in recent months highlights the broader problem: In March and April, the economy shed over 22 million jobs. The United States spent the next several months adding, but that only brought us back halfway to where we were.

Just as importantly, the monthly totals gradually decreased every month since June. In other words, even as the economy added jobs, July's totals were worse than June's, August's totals were worse than July's, September's totals were worse than August's, and so on.

Making matters considerably worse, in December, the economy stopped adding jobs altogether. Indeed, according to the revised totals, the United States shed over 200,000 jobs in the final month of 2020.

Fortunately, in January, the slide started improving, reversing the trend that began last summer, but no one should think for a moment that a national economy that added 49,000 jobs is healthy. The exact opposite is true.

There was some speculation headed into this morning that if the monthly job totals were robust, it might weaken political support on Capitol Hill for a robust COVID relief package. That's now a moot point: this new data shows an employment landscape in need of assistance.

Above you'll find the chart I run every month, showing monthly changes in total jobs since the start of the Great Recession. The image makes a distinction: red columns point to monthly changes under the Bush and Trump administrations, while blue columns point to monthly job changes under the Obama administration.