U.S. adds 235k jobs in August, unemployment rate continues to slowly decline

Total nonfarm payroll employment rose by 235,000 in August, and the unemployment rate declined by 0.2 percentage points 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.

The change in total nonfarm payroll employment for June was revised up by 24,000, from +938,000 to +962,000, and the change for July was revised up by 110,000, from +943,000 to +1,053,000.

With these revisions, employment in June and July combined is 134,000 higher 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

The unemployment rate declined by 0.2 percentage points 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 major worker groups, the unemployment rates for adult men (5.1 percent) and Whites (4.5 percent) declined in August, while the rate for teenagers (11.2 percent) increased.

The jobless rates for adult women (4.8 percent), Blacks (8.8 percent), Asians (4.6 percent), and Hispanics (6.4 percent) showed little change over the month.

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.

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.

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. (See table A-8.)

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.

These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market.

The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Establishment Survey Data

Total nonfarm payroll employment rose by 235,000 in August, following increases of 1.1 million in July and 962,000 in June.

Nonfarm employment has risen by 17.0 million since April 2020 but is down by 5.3 million, or 3.5 percent, from its pre-pandemic level in February 2020.

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.

Employment in professional and business services increased by 74,000 in August. Employment rose in architectural and engineering services (+19,000), computer systems design and related services (+10,000), scientific research and development services (+7,000), and office administrative services (+6,000).

Since February 2020, employment in professional and business services is down by 468,000, over half of which is in temporary help services (-262,000).

Transportation and warehousing added 53,000 jobs in August, bringing employment in the industry slightly above (+22,000) its pre-pandemic level in February 2020.

Employment gains have been led by strong growth in couriers and messengers and in warehousing and storage, which added 20,000 jobs each in August.

Air transportation also added jobs (+11,000), while transit and ground passenger transportation–which includes school buses–lost jobs (-8,000).

In August, employment increased by 40,000 in private education, declined by 21,000 in state government education, and changed little in local government education (-6,000).

In all three industries, these employment changes followed job gains in June and July. August marks the beginning of the traditional back-to-school season.

However, recent employment changes are challenging to interpret, as pandemic-related staffing fluctuations in public and private education have distorted the normal seasonal hiring and layoff patterns.

Since February 2020, employment is down by 159,000 in private education, by 186,000 in state government education, and by 220,000 in local government education.

Manufacturing added 37,000 jobs in August, with gains in motor vehicles and parts (+24,000) and fabricated metal products (+7,000). Employment in manufacturing is down by 378,000 from its pre-pandemic level in February 2020.

The other services industry added 37,000 jobs in August, but employment is 189,000 lower than in February 2020. In August, employment rose in personal and laundry services (+19,000) and in repair and maintenance (+9,000).

Employment in information increased by 17,000 in August, reflecting a gain in data processing, hosting, and related services (+12,000). Employment in information is down by 150,000 since February 2020. 

Employment in financial activities rose by 16,000 over the month, with most of the gain occurring in real estate (+11,000). Employment in financial activities is down by 29,000 since February 2020.

Mining added 6,000 jobs in August, reflecting a gain in support activities for mining (+4,000). Mining employment has risen by 55,000 since a trough in August 2020 but is 96,000 below a peak in January 2019.

Employment in retail trade declined by 29,000 in August, with losses in food and beverage stores (-23,000) and in building material and garden supply stores (-13,000). Retail trade employment is down by 285,000 since February 2020.

In August, employment in leisure and hospitality was unchanged, after increasing by an average of 350,000 per month over the prior 6 months.

In August, a job gain in arts, entertainment, and recreation (+36,000) was more than offset by a loss in food services and drinking places (-42,000). Employment in leisure and hospitality is down by 1.7 million, or 10.0 percent, since February 2020.

In August, employment showed little change in other major industries, including construction, wholesale trade, and health care.

Average hourly earnings for all employees on private nonfarm payrolls rose by 17 cents to $30.73 in August, following increases in the prior 4 months. In August, the average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.99.

The data for recent months suggest that the rising demand for the labor associated with the recovery from the pandemic may have put upward pressure on wages.

However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.

In August, the average workweek for all employees on private nonfarm payrolls was 34.7 hours for the third consecutive month. In manufacturing, the average workweek fell by 0.2 hours over the month to 40.3 hours, and overtime remained at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.2 hours.