By Sarah Chaney Cambon

The U.S. jobs report for January will show whether the economy is picking up from a winter slowdown.

Economists expect employers added 50,000 jobs last month, after payrolls fell in December for the first time since the coronavirus pandemic triggered business shutdowns last spring. The jobless rate is forecast to hold steady at 6.7%.

"It's still going to be a pretty tough month for the jobs market, but it looks like the jobs recovery got back on track," Sarah House, senior economist at Wells Fargo Securities, said. "We're already seeing virus cases come down, we're seeing restrictions lifted, we're seeing the vaccine rollout gather steam."

Many economists say seasonal-adjustment factors could boost the headline payrolls number in January, making predictions for the month particularly tricky. Seasonal adjustments take into account steep layoffs that typically occur after Christmas. And economists say there could be fewer job losses than usual this January because there were so many at the end of last year.

Friday's report also includes annual benchmark revisions to employment, which economists expect could show slight changes to employment losses at the beginning of the pandemic.

The economy has regained about 12 million of the 22 million jobs that were lost in March and April at the onset of the pandemic and related business restrictions. Job growth, though, has slowed since the summer.

The broader economic recovery stalled significantly this winter. Unemployment claims, a proxy for layoffs, have remained above pre-pandemic levels. Consumers cut back on spending, as some were wary of leaving their homes as virus cases surged. Others wanted to shop and dine out, but had limited options.

Late last year, many states and local governments mandated that businesses like restaurants close or reduce operations to combat rising numbers of virus cases. Some places have recently loosened those restrictions. Positive areas include manufacturing, with companies reporting increased demand for goods and new hiring, and housing, where low interest rates and the pandemic have boosted demand.

Economists see the winter lull as temporary. They expect growth to pick up later this year as more people get vaccinated and business restrictions further ease. Many economists also say the economy could benefit from further government stimulus. Congress is considering as much as $1.9 trillion in additional financial aid to help households and businesses. The proposal would bolster unemployment aid, provide funds for vaccine distribution and send $1,400 checks to many Americans.

Employment at restaurants and bars has been particularly hard hit this winter and drove overall payrolls down in December. Warmer temperatures will likely help lift the industry in the coming months.

"When the sun comes out down here, and we can get some people out on some patios, we're going to do a lot better," said Chris Hall, operating partner for an Atlanta-area restaurant group that includes a deli, a bar, a contemporary American restaurant and a pizza place.

Mr. Hall said his restaurants rehired workers after reopening from temporary closures last spring, but overall staffing levels have hovered near 75% of pre-coronavirus levels since the summer.

"This winter has gotten scary," he said. The restaurants' patios are closed and customers remain cautious to dine out amid high virus counts, Mr. Hall said. He recently sent out a message to a group of "die-hard" customers, encouraging them to come support business during a tough winter for sales.

A strong community of customers has helped Mr. Hall's restaurants survive the pandemic so far, he added.

Some industries, particularly ones that build and deliver goods, have fared well in recent months. Friday's report will reveal whether manufacturers, home builders and warehouses continued to churn out jobs.

Consumers have been ramping up orders of items to spruce up their homes, aiding growth at United Solutions Inc. The 665-person manufacturer produces trash and recycling bins, plastic storage and paint buckets out of plants in Massachusetts and Mississippi.

It hired 56 workers in January and is seeking to add 100 more employees to its warehouse and factory floors to meet customer demand, said David Reilly, chief executive of the manufacturer.

"We're just trying everywhere to find the right people," Mr. Reilly said. "It's a challenge."

To attract and retain workers, the company raised starting wages for factory workers by $2 over the past six months to $14 an hour. It is airing job ads on the radio and participating in virtual job fairs. The company is also converting many temporary workers -- formerly the bulk of its workforce -- to permanent positions.

Companies might struggle to find workers in part because the share of people seeking work remains depressed. The labor-force participation rate was 61.5% in December, down from 63.3% in February, before the virus hit. Some people aren't looking for work out of fear of contracting the virus. Others are burdened by increased child-care responsibilities or discouraged by limited job opportunities.

The U.S. continues to face challenges to achieving a full economic recovery. More-transmissible variants of Covid-19, the disease caused by the virus, could keep businesses closed longer. Nearly a quarter of unvaccinated adults said in a Census Bureau survey they won't get the Covid-19 vaccine, potentially delaying herd-immunity prospects and business reopenings.

Many workers are facing long spells of unemployment. Others who lost their jobs earlier in the virus crisis have regained employment, but at much lower wages.

Danielle Robillard, 55 years old, of Troutdale, Ore., was furloughed as a team lead at a corporate travel agency in April. Her job loss turned permanent in September, when she opted to take a company severance package.

She ramped up her job search and was hired in October as an associate expert at T-Mobile, where she answers customers' questions on phone bills and payment plans. Her new position pays $14.75 an hour, or about half her previous wage, leaving her stretched financially.

"If it was enough to pay my mortgage, I wouldn't be so terrified," Ms. Robillard said. Her husband works as a restaurant cook, which means his employment is insecure until vaccines are widely distributed, she added.

Ms. Robillard continues to seek a new job both within and outside of her current company. "The problem is that half the country is looking for a job," she said.

Write to Sarah Chaney Cambon at sarah.chaney@wsj.com

(END) Dow Jones Newswires

02-05-21 0544ET