Almost 40% of unemployed Americans have been out of work for more than six and a half months

While the unemployment rate dropped to 6.3% in January, many of those who remained unemployed were at the limit of regular state benefits.

Published Fri, February 5, 2021 by the USAFacts Team

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According to the Bureau of Labor Statistics, employers added 49,000 jobs to payrolls in January, recovering 22% of jobs lost in December. Total employment remained down by 9.9 million jobs — or around 6% — compared to February 2020. Meanwhile, the national unemployment rate dropped from 6.7% to 6.3% between December and January. A total of 10.1 million Americans were looking for work last month, compared to 10.7 million at the end of last year.

The unemployment rate fell to 6.3% in January.

But around 4 million or 40% of those unemployed Americans in January had been without a job for at least 27 weeks. That is the largest number of Americans facing long-term unemployment since the pandemic began, meaning that more Americans than ever have likely used the last of their regular state unemployment benefits. Most states only cover unemployment insurance for 13 to 26 weeks.

Long-term unemployed Americans who have exhausted state unemployment insurance are currently eligible for Pandemic Emergency Unemployment Compensation (PEUC). The program began last March under the CARES Act and — after an extension from the December stimulus package — now offers up to 24 weeks of additional assistance. The PEUC program is set to end March 14.

The labor force participation rate remained relatively unchanged in January, with 61% of the working-age population employed or actively seeking employment. Of the 100.7 million Americans not in the labor force, almost 7 million reported wanting a job — but were not considered unemployed as they had not sought work in the past month.

Four million Americans had been out of work for more than six and a half months as of January.

Meanwhile, the job gains in January were largely due to 97,000 added positions in professional and business services, as well as 33,900 in public and private education. The leisure and hospitality, retail trade, health care, and transportation and warehousing sectors all lost jobs.

Net job growth in January was largely due to professional and business services.

This was the second consecutive month of net job loss for restaurants and hotels, which struggled as COVID-19 case rates grew through December and early January. The leisure and hospitality industry was the hardest hit when the pandemic began, accounting for 37% of all 22.4 million jobs lost between February and April of last year. In January, leisure and hospitality employment remained down 23% compared to last February, even as total employment across all sectors was down only 6%.

See more data on the pandemic and the state of the nation at the COVID-19 Impact and Recovery Hub.