“Though we gained jobs in January after a December loss, this is not a we’ve-turned-the-corner report,” said Robert Frick, corporate economist at Navy Federal Credit Union. “We especially shouldn’t take solace that the unemployment rate fell dramatically given that’s mainly because more Americans dropped out of the labor force.”
Job growth returned to the U.S. in January, with nonfarm payrolls increasing by 49,000 while the unemployment rate fell to 6.3%, the Labor Department said Friday in the first employment report of the Biden administration.
The soft report did not impact markets negatively, as stocks opened positive and longer-duration government bond yields moved higher.
The sharp drop in the unemployment came as the labor force participation rate edged lower to 61.4% and 406,000 workers left the labor force. However, a more encompassing measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons also fell, dropping to 11.1% from 11.7% in December.