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Jobs growth likely rebounded in January, but the extent of the recovery depends on hotels and restaurants

January’s employment picture appears to have improved over December, but how much so depends in big part on the impact of the virus and restrictions on the struggling hospitality and leisure sector.

The U.S. Bureau of Labor Statistics will release its “employment situation” report for January on Friday morning, detailing the unemployment rate, as well as the number of jobs added or lost last month.

Economists expect 50,000 payrolls were added in January, after a decline of 140,000 in December, according to Dow Jones. The unemployment rate is expected to stay at 6.7%.

There has been some improvement in recent jobs-related data, including Thursday’s weekly jobless claims data, showing 779,000 first time filers. While still quite large, it was the lowest since Nov. 28 and below the 830,000 expected by economists.

Economists’ forecasts are in a wide range with some showing declines in total payrolls but others expecting sizeable gains. NatWest economists, for instance, raised their negative forecast to expectations for a gain of 300,000.

“We’re forecasting [an increase of] 200,000. It shows some improvement certainly relative to December, when there was a contraction,” said Michelle Meyer, head of U.S. economics at Bank of America Global Research.

“The swing factor should be leisure and hospitality because that’s where you had the biggest weakening in the December report,” she said.

Reference: CNBC