U.S. Hiring Dropped Abruptly in August with the Smallest Jobs Gain in Seven Months

the staff of the Ridgewood blog

Ridgewood NJ,U.S. hiring dropped abruptly in August with the smallest jobs gain in seven months, complicating any decision by the Fed to begin scaling back monetary support by the end of the year.  The US Bureau of Labor Statistics reported on Friday ,Total nonfarm payroll employment rose by 235,000 in August, and the unemployment rate declined by 0.2 percentage point to 5.2 percent, the U.S. Bureau of Labor Statistics reported today.

So far this year, monthly job growth has averaged 586,000. In August, notable job gains occurred in professional and business services, transportation and warehousing, private education, manufacturing, and other services. Employment in retail trade declined over the month. This news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry.

Household Survey Data The unemployment rate declined by 0.2 percentage point to 5.2 percent in August. The number of unemployed persons edged down to 8.4 million, following a large decrease in July. Both measures are down considerably from their highs at the end of the February-April 2020 recession. However, they remain above their levels prior to the coronavirus (COVID-19) pandemic (3.5 percent and 5.7 million, respectively, in February 2020).

Among the unemployed, the number of permanent job losers declined by 443,000 to 2.5 million in August but is 1.2 million higher than in February 2020. The number of persons on temporary layoff, at 1.3 million, was essentially unchanged in August. This measure is down considerably from the high of 18.0 million in April 2020 but is 502,000 above the February 2020 level. The number of reentrants to the labor force increased by 200,000 in August to 2.5 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)

The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 246,000 in August to 3.2 million but is 2.1 million higher than in February 2020. These long-term unemployed accounted for 37.4 percent of the total unemployed in August. The number of persons jobless less than 5 weeks, at 2.1 million, was little changed. (See table A-12.) The labor force participation rate, at 61.7 percent in August, was unchanged over the month and has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The participation rate is 1.6 percentage points lower than in February 2020. The employment-population ratio, at 58.5 percent, was little changed in August. This measure is up from its low of 51.3 percent in April 2020 but remains below the figure of 61.1 percent in February 2020. (See table A-1.) In August, the number of persons employed part time for economic reasons, at 4.5 million, was essentially unchanged. There were 4.4 million persons in this category in February 2020. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

The number of persons not in the labor force who currently want a job declined by 835,000 in August to 5.7 million but remains higher than the level in February 2020 (5.0 million). These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force, at 1.6 million in August, decreased by 295,000 over the month. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 392,000 in August, down by 115,000 from the previous month.

Household Survey Supplemental Data In August, 13.4 percent of employed persons teleworked because of the coronavirus pandemic, little changed from the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic. In August, 5.6 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic–that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is up from 5.2 million in July. Among those who reported in August that they were unable to work because of pandemic-related closures or lost business, 13.9 percent received at least some pay from their employer for the hours not worked, up from 9.1 percent in the prior month. Among those not in the labor force in August, 1.5 million persons were prevented from looking for work due to the pandemic, little changed from July. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.)