Unemployment Rate Decreases to 6.3% as Professional and Business Services Positions Added
The unemployment rate fell by 0.4 percentage point to 6.3 percent in January, while nonfarm payroll employment changed little (+49,000), the U.S. Bureau of Labor Statistics reported today. The labor market continued to reflect the impact of the coronavirus (COVID-19) pandemic and efforts to contain it. In January, notable job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.
Among the unemployed, the number of persons on temporary layoff decreased in January to 2.7 million. This measure is down considerably from the recent high of 18.0 million in April but is 2.0 million higher than its February level. The number of permanent job losers, at 3.5 million, changed little in January but is 2.2 million higher than in February. The number of reentrants to the labor force decreased in January to 2.0 million.
In January, employment in professional and business services rose by 97,000, with temporary help services accounting for most of the gain (+81,000). Job growth also occurred in management and technical consulting services (+16,000), computer systems design and related services (+11,000), and scientific research and development services (+10,000). These gains were partially offset by job losses in services to buildings and dwellings (-14,000) and in advertising and related services (-6,000). Since February, employment in professional and business services is down by 825,000.
WHAT DOES THIS MEAN FOR STAFFING?
While we saw a further decrease in hospitality and retail positions in January, we continue to see an optimistic outlook for positions in professional services sectors. Additionally, we are seeing the number of professionals that had been put on temporary layoff or furloughed last year, returning to full time work. However, there is still room for improvement and growth. Employed professionals within the professional services sector is still 825,000 less than February 2020. We anticipate slow, but continued growth as we continue into 2021.