Business News: US Economy gains 49000 Jobs, but economy still under grip of Virus.
US employment growth rebounded moderately in January and job losses in the previous month were greater than initially thought, underscoring the urgent need for additional government aid funds to support the recovery from the COVID-19 pandemic.
The Labor Department’s employment report on Friday showed job losses in manufacturing and construction, two sectors that have supported the economy. There have been further losses in restaurants and bars. Retailers and employers in the transport sector are also made redundant.
President Joe Biden is urging the US Congress to approve a $ 1.9 trillion recovery plan, but this is meeting resistance from Republican lawmakers who are now worried about the growing national debt. The Senate worked late into the night Thursday, with Biden’s Democratic colleagues trying to ignore Republican opposition to the COVID-19 recovery plan.
“The weakness in today’s job report paves the way for the Biden administration to promote a higher spending package and bring relief to many Americans and companies as they continue to struggle with the pandemic,” said Charlie Ripley, senior investment strategist. at Allianz Investment Management.
Employment increased by 49,000 jobs last month. The December data was revised to show a loss of 227,000 jobs instead of the 140,000 as previously reported. Employment is down by 9.9 million jobs from its peak in February 2020.
The Congressional Budget Office estimates that employment will not return to pre-pandemic levels until 2024. Economists interviewed by Reuters had predicted a 50,000 job increase in January.
The government also said the economy created 250,000 fewer jobs in the 12 months to March 2020 than previously reported.
The December wage drop was the first in eight months and came during renewed restrictions on businesses such as restaurants and bars to slow the rise in the number of coronavirus infections. Although these business restrictions continued into the first half of January, there is grounds for cautious optimism as some employment measures have stabilized since the second half of January when the authorities began easing the restrictions.
The government conducted a mid-month survey of businesses and households for the January employment report. It also found that the response rate to the survey was “slightly below average”.
The nearly $ 900 billion in additional aid provided by the government at the end of December will likely help in the coming months. Additionally, the number of COVID-19 infections appears to have peaked in early January, a trend that could increase intakes over the next few months if it continues.