AP Explains: 5 key takeaways from the August jobs report
WASHINGTON – By some measures, the shrunken U.S. job market continued a solid recovery last month, with many employers recalling workers who had been temporarily laid off when the coronavirus erupted in the spring.
The economy added nearly 1.4 million jobs in August, and the unemployment rate sank to 8.4% from 10.2% in July. Those improvements came despite a summertime surge in confirmed COVID-19 cases and the failure of Congress to pass another rescue aid package that most economists say is essential to sustain any recovery.
“The recovery continues to plow on,’’ said Andrew Hunter, senior U.S. economist at Capital Economics.
Yet hiring slowed for a second straight month. The August job gain was also the smallest in four months. And Friday’s jobs report suggested that many of the springtime job cuts have become permanent.
Here are five takeaways from the August jobs report:
THERE’S STILL A LONG WAY TO GO
As the pandemic slammed the United States in March and April, employers slashed 22 million jobs. Since then, the job market has been gradually bouncing back. From May through August, it’s added 10.6 million positions. That’s a robust gain. But it equals not even half the jobs that vanished in the springtime collapse. To take one example, factories now employ 720,000 fewer workers than they did in February.
“There obviously remains a lot of work to be done to return the labor market to a semblance of health,’’ said Sophia Koropeckyj, a managing director at Moody’s Analytics. “If the labor market were to generate jobs at the Au
gust rate, it would take 8.5 months to get back to the pre-pandemic level.
“And that is a big if, since we expect that pace of recovery to slow in coming months as the U.S. grapples with the containment of the spread of the virus in the absence of a widely available vaccine for COVID-19.’’
THE EASY PART IS OVER
Much of the job growth in August – and since May – comes from employers recalling workers they had laid off when the viral outbreak forced them to either curb operations
or close down entirely. As businesses have begun to reopen, the number of Americans on temporary layoff has dropped sharply, from 18.1 million in April to 6.2 million in August. Last month alone, the number fell by 3.1 million.
But lots of jobs aren’t coming back. The number of people who are considered permanently laid off has risen from 1.3 million in February to 3.4 million in August. As a result, the number of Americans who have been without a job for at least six months has grown for four straight months. The
figure reached 1.6 million in August even though the overall number of unemployed people dropped.
“The recovery has been rapid, but this is still the easy part of it – with the harder part ahead,’’ Jason Furman, a professor at Harvard Kennedy School who was chief economic adviser in the Obama White House, wrote on Twitter. “Recalling people from layoff is easier than creating new jobs.’’
HISPANIC EMPLOYMENT ROSE, BUT DISPARITIES
See JOBS/B2