The unemployment rate declined in January to 6.3 percent as employers added 49,000 jobs in the midst of the pandemic, including 3,800 in accounting and bookkeeping services.
The U.S. Bureau of Labor Statistics reported improved job numbers Friday for January after steep job losses of 227,000 in December, when the unemployment rate was 6.7 percent. Professional and business services added 97,000 jobs, although temporary help accounted for most of the gain, adding 81,000 jobs. However, other sectors continued to shed jobs, such as leisure and hospitality, which lost 61,000 jobs after losing 536,000 in December. Average hourly earnings increased by 6 cents to $29.96.
The economy is continuing to struggle during the COVID-19 pandemic, although the slow rollout of vaccines is starting to pick up some speed and helping some businesses recover. The approval in December of a stimulus package may also be helping businesses hire more workers as they apply for loans from the Paycheck Protection Program and consumers start to spend the Economic Impact Payments they receive this year. Accountants will be aiding clients with applying for those loans and with preparing their taxes this season.
“Going into January we should start to see greater accounting roles being added simply because we’re going into tax season,” said Phil Noftsinger, executive vice president at CBIZ, a Top 100 Firm. “This year, so far we don’t have any delays to the filing deadline, although that could occur. Overall, though, what you’re seeing is the length of the pandemic, job losses as a result of companies running out of the steam, and the need for continued fiscal support for small businesses and individuals. With case counts coming down and vaccines rolling out, I think all of us can start to see light at the end of the tunnel here, but it’s going to be a little bit longer. After we get case counts coming down to where we feel more comfortable, there’s still an element of fear among some of the population as things reopen. It’s not like everybody is going to go and run out to Disney World.”
CBIZ produces its own Small Business Employment Index to track hiring trends among companies with 300 or fewer employees, and on Friday it reported a sharp seasonally adjusted decrease of 1.29 percent in January. Of the companies surveyed, 15.3 percent boosted employment last month, while 51.4 percent refrained from changing their staffing levels and 33.3 percent decreased their headcount. CBIZ saw hiring declines across various industries, with the biggest declines in accommodation and food services along with arts and entertainment. There were smaller declines in agriculture, government, rental and leasing services, and administrative and support services. The only industry to increase hiring was educational services. Geographically, all four regions in the survey saw decreased hiring, with the biggest declines in the Northeast and West, while the Central and Southeast regions showed less drastic dips.
“You can see graphically for the Northeast and the West, where you typically have the largest population centers and the largest restrictions, that’s where you’re seeing the decline in the small business area,” said Noftsinger. “As those start to open up, I expect some lift. It’s not a good number for January, but I’m optimistic for even just February.”