August’s Non-farm payroll report saw an increase of 1.37 million jobs, with the unemployment rate falling by 8.4% with the U.S. economy continuing to climb from the downturn since the covid pandemic.
The unemployment rate was significantly lower than the recent months since the coronavirus shut down in March, according to Labor Department figures released Friday. Alternative data that includes discouraged workers and those holding part-time jobs for economic reasons also dropped to 14.2% from 16.5% in July and 22.8% at the peak in April.
Economists surveyed by Dow Jones were expecting a growth of 1.32 million and the jobless rate to decline to 9.8% from 10.2% in July.
“It’s another great day for American jobs and American workers,” said Vice President Mike Pence. He added that the job growth and the lower unemployment rate is “real evidence that the American comeback is underway.”
Markets initially reacted positively to this news, however, stocks soon resumed their downturn with Thursday’s aggressive sell-off continuing.
The hiring for new government jobs helped the growth, with 344,000 workers accounting for a quarter of the monthly gain. Most of that hiring came from Census workers, whose rolls increased by 328,000 jobs. Despite worries of a revenue shortfall at a municipal level, local government employment rose by 95,000 jobs.
The total of those on furlough also fell dramatically. There were 24.2 million people who said they not working because their employer either closed or lost business due to the pandemic, down from 31.3 million in July.
The number of people on temporary lay-off also declined, falling by one-third to 6.2 million, well below the high of 18.1 million in April. Permanent job losses, however, also increased by 534,000 to 3.4 million. Laid-off workers who returned to jobs also fell by 263,000 to 2.1 million.
The Labor Department’s household survey indicated employment growth of 3.8 million and a decrease of 2.8 million on the unemployment rolls. That left employment down 11.5 million from pre-pandemic levels.
Other large employment gains came from the retail sector, which added 249,000 positions, while professional and business services rose by 197,000, and leisure and hospitality, the hardest-hit sector during the pandemic, saw a gain of 174,000 jobs, most coming from the reopening of bars and restaurants. Education and health services also showed strong gains of 147,000 jobs, while transportation rose by 78,000 due to a big gain in warehousing and storage jobs. Financial activities increased by 36,000 while manufacturing increased by 29,000 and wholesale trade was up by 14,000.
The unemployment rate for Black Americans fell 1.6 percentage points to 13% while the rate for the Asian population declined to 10.7% and the Hispanic level slid 2.4 percentage points to 10.5%.
The report comes after a week of mostly positive economic signals, with retail sales, real estate, and manufacturing showing sharp rebounds off their coronavirus lows. Economists still worry that without another round of stimulus from Congress, these increases in activity could be short-lived.
Revisions to previous months’ totals showed a slight decline from the initial counts. June lost 10,000 to 4.78 million while July lost 29,000 to go to 1.73 million.
