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The recovery in the US labour market disappointed the market for the second month in a row, with only modest growth in January, highlighting the continuing difficult prospects facing millions of unemployed.
A report released by the Labor Department on Friday showed that non-farm payrolls rose by 49000 in January, while the number of people who fell in December was revised down to 227000. The unemployment rate fell to 6.3%. The labour force participation rate is also lower.
The January data may further prove the need for a large-scale epidemic relief plan. Us President Joe Biden has proposed a $1.9 trillion package, but many Republicans prefer not to provide more aid for the time being, but instead wait for the $900 billion bailout to flow into the economy in December.
The weaker-than-expected report reflected layoffs in retail trade, transport and warehousing, and leisure and hotel sectors, while only a small increase was recorded in other sectors. The latest employment data offset the optimism brought by a series of recent strong economic data, including growth in manufacturing and housing construction.
Economists surveyed by Bloomberg forecast a median increase in employment of 105000 and an unemployment rate of 6.7 per cent. Estimates of changes in employment range from a decrease of 250000 to an increase of 400000.
Revised government figures show that the United States lost 9.3 million jobs in 2020.
The average hourly wage rose 0.2% in January from a month earlier, with an estimated increase of 0.3%, compared with a 1.0% increase the month before.
Private sector non-farm payrolls increased by 6000 in the month, compared with a decrease of 204000 the month before. The 34 economists surveyed forecast a decrease of 120000 to an increase of 400000.