AP Explains: Takeaways from August’s 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 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 August 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.

Hispanic employment rose, but disparities persist

The unemployment rate dropped for all races in August. But white Americans, as always, enjoyed much lower joblessness than Black and Hispanic workers.

One million more Hispanics reported having jobs in August, a 4% increase from July. Hispanics are disproportionately likely to work in the kinds of services jobs — at restaurants or construction sites, for example — that have been returning as businesses reopen. The unemployment rate for Hispanics tumbled to 10.5% from 12.9% in July