August Gains 1.4 Million Jobs, Unemployment Rate Drops To 8.4 Percent

WASHINGTON – Total nonfarm payroll employment rose by 1.4 million in August, and the unemployment rate fell to 8.4 percent, the U.S. Bureau of Labor Statistics reported today.

These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it.

In August, an increase in government employment largely reflected temporary hiring for the 2020 Census.

Notable job gains also occurred in retail trade, in professional and business services, in leisure and hospitality, and in education and health services.

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 11 cents to $29.47. The average hourly earnings of private-sector production and nonsupervisory employees increased by 18 cents to $24.81, following a decrease of 10 cents in the prior month.

The change in total nonfarm payroll employment for June was revised down by 10,000, from +4,791,000 to +4,781,000, and the change for July was revised down by 29,000, from +1,763,000 to +1,734,000.

With these revisions, employment in June and July combined was 39,000 less than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

Household Survey Data

In August, the unemployment rate declined by 1.8 percentage points to 8.4 percent, and the number of unemployed persons fell by 2.8 million to 13.6 million.

Both measures have declined for 4 consecutive months but are higher than in February, by 4.9 percentage points and 7.8 million, respectively.

Among the major worker groups, the unemployment rates declined in August for;

• adult men (8.0 percent),
• adult women (8.4 percent),
• teenagers (16.1 percent),
• Whites (7.3 percent),
• Blacks (13.0 percent),
• Hispanics (10.5 percent) and
• Asians (10.7 percent)

Among the unemployed, the number of persons on temporary layoff decreased by 3.1 million in August to 6.2 million, down considerably from the series high of 18.1 million in April.

In August, the number of permanent job losers increased by 534,000 to 3.4 million; this measure has risen by 2.1 million since February.

The number of unemployed reentrants to the labor force declined by 263,000 to 2.1 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)

The number of unemployed persons who were jobless less than 5 weeks decreased by 921,000 to 2.3 million in August, and the number of persons jobless 5 to 14 weeks fell by 2.0 million to 3.1 million.

The long-term unemployed (those jobless for 27 weeks or more) numbered 1.6 million, little changed over the month.

The labor force participation rate increased by 0.3 percentage point to 61.7 percent in August but is 1.7 percentage points below its February level.

Total employment, as measured by the household survey, rose by 3.8 million in August to 147.3 million. The employment-population ratio rose by 1.4 percentage points to 56.5 percent but is 4.6 percentage points lower than in February.

In August, the number of persons who usually work full time rose by 2.8 million to 122.4 million, and the number who usually work part-time increased by 991,000 to 25.0 million. Part-time workers accounted for about one-fourth of the over-the-month employment gain.

The number of persons employed part-time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 871,000 to 7.6 million in August, reflecting a decrease in the number of people who worked part-time due to slack work or business conditions (-1.1 million). The number of involuntary part-time workers is 3.3 million higher than in February.

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. This group includes persons who usually work full time and persons who usually work part-time.

In August, the number of persons not in the labor force who currently want a job declined by 747,000 to 7.0 million; this measure is 2.0 million higher than in February.

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 currently want a job, the number of persons marginally attached to the labor force, at 2.1 million, changed little in August.

These individuals had not actively looked for work in the 4 weeks preceding the survey but wanted a job, were available for work and had looked for a job sometime in the prior 12 months.

The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, decreased by 130,000 in August to 535,000.

Household Survey Supplemental Data

In August, 24.3 percent of employed persons teleworked because of the coronavirus pandemic, down from 26.4 percent in July. 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 coronavirus pandemic.

In August, 24.2 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 down from 31.3 million in July.

Among those who reported in August that they were unable to work because of pandemic-related closures or lost business, 11.6 percent received at least some pay from their employer for the hours not worked.

About 5.2 million persons not in the labor force in August were prevented from looking for work due to the pandemic. This is down from 6.5 million in July. To be counted as unemployed, by definition, individuals must either be actively looking for work or on temporary layoff.

Establishment Survey Data

Total nonfarm payroll employment rose by 1.4 million in August, following increases of larger magnitude in the prior 3 months. In August, nonfarm employment was below its February level by 11.5 million, or 7.6 percent.

Government employment rose in August, largely reflecting temporary hiring for the 2020 Census.

Notable job gains also occurred in retail trade, in professional and business services, in leisure and hospitality, and in education and health services.

Employment in government increased by 344,000 in August, accounting for one-fourth of the over-the-month gain in total nonfarm employment.

A job gain in federal government (+251,000) reflected the hiring of 238,000 temporary 2020 Census workers. Local government employment rose by 95,000 over the month. Overall, government employment is 831,000 below its February level.

Retail trade added 249,000 jobs in August, with almost half the growth occurring in general merchandise stores (+116,000). Notable gains also occurred in motor vehicle and parts dealers (+22,000), electronics and appliance stores (+21,000), and miscellaneous store retailers (+17,000). Employment in retail trade is 655,000 lower than in February.

In August, employment in professional and business services increased by 197,000. More than half of the gain occurred in temporary help services (+107,000). Architectural and engineering services (+14,000), business support services (+13,000), and computer systems design and related services (+13,000) also added jobs over the month. Employment in professional and business services is 1.5 million below its February level.

Employment in leisure and hospitality increased by 174,000 in August, with about three-fourths of the gain occurring in food services and drinking places (+134,000). Despite job gains totaling 3.6 million over the last 4 months, employment in food services and drinking places is down by 2.5 million since February.

In August, employment in education and health services increased by 147,000 but is 1.5 million below February’s level. Health care employment increased by 75,000 over the month, with gains in offices of physicians (+27,000), offices of dentists (+22,000), hospitals (+14,000), and home health care services (+12,000). Elsewhere in health care, job losses continued in nursing and residential care facilities (-14,000). Employment in private education rose by 57,000 over the month.

Employment in transportation and warehousing rose by 78,000 in August, with gains in warehousing and storage (+34,000), transit and ground passenger transportation (+11,000), and truck transportation (+10,000). Employment in transportation and warehousing is down by 381,000 since February.

The other services industry added 74,000 jobs in August, reflecting gains in membership associations and organizations (+31,000), repair and maintenance (+29,000), and personal and laundry services (+14,000). Employment in other services is 531,000 lower than in February.

Financial activities added 36,000 jobs in August, with most of the growth in real estate and rental and leasing (+23,000). Employment in financial activities is down by 191,000 since February.

In August, manufacturing employment rose by 29,000, with gains concentrated in the nondurable goods component (+27,000). Despite gains in recent months, employment in manufacturing is 720,000 below February’s level.

Employment in wholesale trade increased by 14,000 in August, reflecting an increase of 9,000 in the nondurable goods component. Wholesale trade employment has declined by 328,000 since February.

In August, employment changed little in mining, construction, and information.

The large employment fluctuations over the past several months–especially in industries with lower-paid workers–complicate the analysis of recent trends in average hourly earnings.

The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.6 hours in August. In manufacturing, the workweek rose by 0.3 hour to 40.0 hours, and overtime increased by 0.1 hour to 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.0 hours.