Total nonfarm payroll employment rose by 1.4 million in August, while the unemployment rate fell by 1.8 percentage points to 8.4%, according to the latest employment report from the Bureau of Labor Statistics. Nonfarm employment still stands at 7.6% lower than its February level, with 11.5 million fewer jobs.
The number of unemployed persons in the U.S. fell by 2.8 million in August, down to 13.6 million. Both the unemployment rate and total unemployed number have been declining for four months, though still remain higher than February’s numbers by 4.9 percentage points and 7.8 million, respectively. According to the BLS, this ongoing improvement reflects the “continued resumption of economic activity” that had been scaled back due to the COVID-19 pandemic.
The number of unemployed persons on temporary layoff fell by 3.1 million in August, down to 6.2 million. This marks a steep decrease from the series high of 18.1 million in April. The number of permanent job losers rose by 534,000 to 3.4 million, up by 2.1 million since February. The number of unemployed reentrants to the labor force fell by 263,000 to 1 million.
“The number of persons working part-time but who would prefer full-time employment continued to decline, falling 871,000 in August,” says Doug Duncan, chief economist at Fannie Mae. “This group is an important indicator of under-employment, i.e., persons who are officially employed but are working and earning less than they would like. The U-6, a broader measure of labor utilization that includes this group, fell by 2.3 percentage points to 14.2%. Average hourly earnings grew at a 4.7% year-over-year pace in August, unchanged from last month.”
Government employment rose by 334,000 jobs in August, largely reflecting a bump in temporary hires for the 2020 Census, which accounted for 238,000 new jobs last month. Retail trade, professional and business services, leisure and hospitality, and education and health services also saw strong job gains in the last month, with between 147,000 and 249,000 new jobs in each sector.
“Residential construction employment (including specialty trade contractors) grew by 27,700 this month, a slower pace than in last month’s report, but a welcome gain for a sector dealing with supply constraints,” Duncan adds.
In supplemental questions added to the BLS household survey starting in May, 24.3% of employed persons reported that they had teleworked in August specifically because of the COVID-19 pandemic, down from 26.4% in July.
Over 24 million persons reported they had been unable to work at some point in the last four weeks because their employer had closed or because they had lost business due to the pandemic—down from 31.3 million in July. Of this number, 11.6% received some pay from their employer for hours not worked.
About 5.2 million persons not in the labor force were prevented from looking for work due to COVID-19, down from 6.5 million in July.
“Companies are starting to make more permanent staffing changes as the pandemic lingers. The increase in permanent job losses points to longer-term unemployment and prolonged economic recovery,” says Odeta Kushi, deputy chief economist at First American. “The only major sector to display immunity to the coronavirus is the housing market, which has experienced a strong V-shaped recovery. This is largely due to the fact this has been a services-driven recession, disproportionately hurting younger, lower-wage renters that are less likely to be homeowners or home buyers. The bifurcated landscape has allowed potential homeowners who are still employed to channel increased savings toward buying a home, and to take advantage of record low mortgages. … Housing has remained immune due to demographic demand and the Fed policy keeping rates low, but it cannot remain immune to the impact of homeowners having less household income.”
