Economy adds 1.4 million jobs in August, unemployment falls to 8.4 percent
The U.S. added 1.4 million jobs in August, the Labor Department reported Friday.
The unemployment rate declined to 8.4 percent from 10.2 percent in July, according to the August jobs report, falling below 10 percent for the first time since March. Labor force participation also increased by 0.3 percent in August, an indication of both increasing strength in the job market and rising confidence among job-seekers.
August marks the fourth consecutive month of job gains and declining unemployment since the U.S. economy bottomed out in April. More than 20 million Americans lost their jobs that month, pushing the unemployment rate to a post-Great Depression high of 14.7 percent.
The August jobs report was also in line with the consensus expectations of private-sector economists, who projected gains between 1.2 and 1.4 million jobs last month.
The economy has now recovered roughly 10.7 million of the jobs lost to the pandemic as of August, though the number of unemployed Americans is still 11.5 million above its pre-coronavirus level in February.
August also brought declines in the number of Americans unemployed for less than five weeks and those unemployed for anywhere between five and 14 weeks, while the number of long-term unemployed Americans was little changed.
The solid August jobs report comes amid deep partisan stalemate over another round of coronavirus relief and fiscal stimulus. Economists across the ideological spectrum have called for boosting unemployment benefits, housing protections and further aid to cash-strapped state and local governments.
President Trump hailed the report in a Friday tweet touting the “Great Jobs Numbers!”
“Great Jobs Numbers! 1.37 Million Jobs Added In August. Unemployment Rate Falls To 8.4% (Wow, much better than expected!). Broke the 10% level faster and deeper than thought possible,” Trump tweeted at 9:04 a.m., 26 minutes before the federal ban on executive branch commentary about market-moving data with one hour of release expired.
Republican leaders who favor a smaller package closer to $1 trillion seized on the August numbers as proof that lawmakers should be focused on bringing Americans back to work as quickly as possible.
“For four months in a row now, Americans safely and sensibly got back to work,” said Sen. John Barrasso (R-Wyo.), chairman of the Senate Republican Conference.
“Republicans are ready to pass targeted and focused relief to get millions more people back on the job. Democrats are blocking this help.”
Even so, the August jobs report showed dangerous signs of a slowing recovery that could be further threatened by a plateau in coronavirus cases heading into autumn.
The number of those who have lost their job permanently increased by 534,000 in August, rising to 3.4 million in total and 2.1 million since February. An increasing number of permanent job losses reflects deepening long-term to damage to the economy as more temporary layoffs become permanent.
Some of the industries hit hardest by the pandemic have yet to recover many of the workers lost in March and April. The food and beverage service industry regained 134,000 workers in August and 3.6 million workers since April, but still has 2.5 million fewer workers than it did in February.
Retailers also added 249,000 jobs in August, but still have 655,000 fewer workers than in February.
One-fourth of the overall August employment gain also came from government jobs, including the hiring of 238,000 temporary census workers. Those hired to help conduct the census will lose those jobs after they are completed.
“The private sector added only 1.0 million jobs in August, down from 4.7 million in June and 1.5 million in July. That suggests the jobs recovery is slowing down,” wrote Julia Pollak, labor economist at ZipRecruiter, in a Friday tweet.
“If we sustain the current pace of recovery, it will be a full year before private sector employment returns to pre-Covid February levels. If the pace of recovery continues to slow, the crisis could drag on for several years.”
The gap between white unemployment and Black unemployment also increased in August, according to Gbenga Ajilore, senior economist at the left-leaning Center for American Progress. That is a troubling sign given the persistently higher rates of unemployment experienced by Black Americans and the disproportionate toll of the pandemic felt by communities of color.
Updated at 10:02 a.m.