The U.S. economy added 49,000 jobs to the labor market in January in another sign that the economic recovery is still tepid as the nation continues to fight the impact of the coronavirus pandemic. January’s gains came after steep losses in December due to the resurgence of the virus, but most of the hiring last month was in temporary professional services.

The number of people unemployed decreased to 10.1 million during the first month of the new year as the labor market rebounded from the latest round of shutdowns following a second wave of COVID-19 cases. The unemployment rate fell to 6.3%, from 6.7% previously, the Department of Labor reported.

Although both measures have decreased from Dec. 2020 and are significantly lower than their April 2020 highs, they are still above pre-pandemic levels when there were 5.7 million unemployed and an unemployment rate of 3.5% in Feb. 2020.

Notable job gains in professional and business services and education were offset by losses in leisure and hospitality, retail trade, health care, and transportation and warehousing. Employment in leisure and hospitality declined by 61,000, following a steep decline (-536,000) in December.

The labor participation rate remained at 61.4%, and the number of people on temporary layoff decreased in January by 300,000 to 2.7 million. 

Unemployment by Race and Gender

The recovery in the labor market continues to be uneven by race, with Black and Hispanic unemployment still significantly higher than for White and Asian workers. 

The unemployment rate for adult men and women is equal at 6%.

This is the first unemployment report since President Joe Biden took office and comes as he advocates for a $1.9 trillion stimulus package that will provide Americans with $1,400 stimulus payments and $400 of weekly unemployment benefits. "We can't do too much here — we can do too little," Biden said in reaction to the report. "It's not just the macroeconomic impact on the economy and our ability to compete internationally," he added. "It's people's lives. Real live people are hurting, and we can fix it."