Corporate Economist Robert Frick, Navy Federal Credit Union, on the January Jobs Report that Shows 49,000 Jobs Added to the Economy; the Unemployment Rate Dropped to 6.3 Percent.

February 5, 2021

Though we gained jobs in January after a December loss, this is not a we’ve-turned-the-corner report.

  • Frick want on to say: “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.”
  • The unemployment rate fell because fewer people are actively looking for a job – a smaller labor force is not an indication of a healthy job market. Ideally a “healthy” labor market has high labor market participation AND a lower unemployment rate because people have jobs.
  • The economy added jobs – a reversal from the previous month recording job losses.
  • Why It Matters: The economy remains “down” 10 million jobs since March/April last year when America effectively “shut down” to stop the spread of the coronavirus. Questions remain about how best to recover these jobs (economic stimulus? a changing economy?) and how that impacts the health of the U.S. economy overall.

Official report from the US gov’t.

by Jenna Lee,