Total nonfarm payroll employment rose by 315,000 in August, slightly lower growth than the 528,000 jobs added during July, according to the latest jobs report from the U.S. Bureau of Labor Statistics (BLS). The unemployment rate inched up from 3.5% in July to 3.7%. The number of unemployment persons in August increased by 344,000 to 6 million.
“The August report shows that hiring in the U.S. remained strong with 315,000 jobs added and a significant increase in the labor force participation rate,” Zonda chief economist Ali Wolf says. “The strength in the labor market has left some perplexed given the change in Federal Reserve policy and the ensuing slowing of the economy in some sectors.”
The labor force participation rate in August increased by 30 basis points on a month-over-month basis to 62.4%, but remains 1 percentage point below its February 2020 level. The employment-population ratio was little changed at 60.1% in August and remains 1.1 percentage points below its February 2020 value.
Among the unemployed, the number of permanent job losers increased by 188,000 to 1.4 million in August. The number of long-term unemployed—those jobless for 27 weeks or more—was little changed at 1.1 million in August. Long-term unemployed individuals accounted for 18.8% of all unemployed persons in August, according to the BLS.
The number of persons not in the labor force who currently want a job declined by 361,000 to 5.5 million in August. The measure is 500,000 above its February 2020 level. These individuals are not counted as unemployed because they were not actively looking for work during the four weeks preceding the Household Survey or were unavailable to take a job. Among those not in the labor force in August, 523,000 persons were prevented from looking for work due to the pandemic, little changed from July. Discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, numbered 366,000 in August, relatively unchanged from July.
“What’s important to remember is that the labor market is a great way to track real-time trends but is not a good number to forecast the future,” Wolf says. “Jobs data typically lags when the market starts to shift.”
