Sep 4, 2020 - Economy

U.S. economy added 1.4 million jobs in August

Data: BLS; Chart: Axios Visuals

The U.S. added 1.4 million jobs last month, while the unemployment rate fell to 8.4% from 10.2% in July, the government announced on Friday.

Why it matters: The labor market is rebounding, but the pace of hiring has dropped off from the fury of job gains seen earlier this summer. The slowdown could be a sign of what's to come: a long, sluggish job market recovery.

By the numbers: The unemployment rate unexpectedly fell by 1.8 percentage points — hitting single digits for the first time since March.

  • Still, the jobless rate is still the worst in years and much higher than the 3.5% seen in February before effects of the coronavirus pandemic hit the labor market.
  • The payroll gains were boosted by the hiring of 238,000 2020 Census workers, but those jobs aren't permanent.

Between the lines: Economists are closely watching the workers who were furloughed or temporarily laid off at the onset of the pandemic — and how many of those job losses are becoming permanent.

  • The number of people on temporary layoff is falling. As of August, 6.2 million were in this category — a decline of 3.1 million. For context, this number skyrocketed to a record 18.1 million in April.
  • But the number of people who said their job loss was permanent rose by 534,000 to 3.4 million — the highest since 2013. This figure has jumped by a cumulative 2.1 million people since February.

The big picture: Congress remains deadlocked over another stimulus package that could support the job market and head off coming layoffs.

The bottom line: The job market is still solidly in the hole, with 11 million fewer jobs than before the pandemic clobbered the economy.

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