U.S. economy added 1.4 million jobs in August
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.
- President Trump has praised job gains in recent months, even though they have consistently slowed from June's surprise 4.8 million jump.
The bottom line: The job market is still solidly in the hole, with 11 million fewer jobs than before the pandemic clobbered the economy.