These 7 charts from the August jobs report show how far the labor market recovery has come — and how much further it has to go
Johnny Louis/Getty Images
- The US economy added 1.37 million jobs in August, and the unemployment rate declined to 8.4%, the Labor Department reported Friday.
- While the report was stronger than economists expected, it also showed that the pace of the labor market recovery from the coronavirus pandemic has continued to slow down.
- Here are seven charts that break down the report, showing how far the labor market recovery has come and how far there is to go.
- Visit Business Insider's homepage for more stories.
The August jobs report yet again showed that while the US labor market is recovering from the shock of the coronavirus pandemic, the pace is slowing and there's still a long way to go to reach pre-pandemic levels.
The US economy added 1.4 million jobs in August, and the unemployment rate ticked down to 8.4%, the Labor Department reported Friday. So far, the US economy has recovered 48% of jobs from pre-coronavirus levels.
"Progress is clearly being made but there are still 11.5 million people who are out of a job as a result of the COVID shock," said Michelle Meyer, US economist at Bank of America, in a Friday note.
And, the overall pace of job gains slowed in August from previous months. "The private sector only added 1.0 million jobs which shows a deceleration from the recent pace of job creation," said Meyer. "Clearly there is still more work to be done to fully heal the labor market."
Provided below are seven charts breaking down the most important data points in the August jobs report.
The unemployment rate also reached its first single-digit reading of the coronavirus pandemic in August, and is down significantly from the peak of 14.7% in April.
Still, the unemployment rate is historically high. It's more than twice the pre-pandemic low of 3.5%.
2. Nonfarm payroll jobs rose by about 1.4 million in August.The headline payrolls number was slightly above consensus, which estimated that about 1.35 million jobs would be added in the month.
The print was boosted by the US Census, which hired about 238,000 temporary workers in August.
In addition, private-sector job growth slowed during the month. It was about 1 million in August, down from 1.5 million in July.
3. The labor force participation rate also ticked up in August, but is still below pre-pandemic levels.There are some positive signs that people are indeed returning to work following mass furloughs and layoffs due to the coronavirus pandemic.
The labor force participation rate, which measures the share of working-age adults that are either employed or actively seeking jobs, increased in August.
This shows that there are more people either back at work or looking to go back to work as the US economy continues to reopen from virus-related shutdowns earlier in the year.
4. Similarly, the employment-to-population ratio increased in August, but remains lower than before the pandemic.This ratio specifically measures those that have a job as a percentage of the total population, showing that more people are finding their way back into the workforce.
"You had a huge increase in both in the labor force, a huge increase in those employed and a huge decrease in those unemployed," Dan North, chief economist for North America at Euler Hermes told Business Insider. There were "very good signs of health there," he added.
5. Most industry sectors saw job growth in August, with government and retail trade employment posting particularly large gains.While employment grew in most sectors, the overall pace slowed, indicating that so-called "low-hanging fruit" jobs might be drying up — this refers to jobs that workers returned to after temporary layoffs due to the coronavirus pandemic.
One example of this is the slowed pace of jobs added back in leisure and hospitality, one of the industries hit hardest by the pandemic and related shutdowns. Even with the employment gains, total jobs are down 2.5 million since February, and the unemployment rate in the sector is 21.3%.
It's difficult to see how "the labor market is going to have a more easy win if that sector — the one that's most directly affected and constrained by the virus — is starting to taper off how many jobs it can add," Nick Bunker, an economist at Indeed, told Business Insider.
In addition, government employment was boosted by temporary hiring for the US Census. Overall employment in the sector remains 831,000 below its February level.
6. While the number of workers on temporary layoff has dramatically declined, the number of people facing permanent job losses is rising.It's a good thing that temporary layoffs declined, as it shows that workers are returning to their previous jobs.
On the flip side, the increase in permanent layoffs is concerning. It's much harder for people to find jobs after a permanent layoff, and if Americans can't go back to work, it means the economic recovery will take a lot longer.
"The first round of shutdowns did indeed create permanent job loss, and people saying 'I don't have a job to go back to,'" said Dan North, chief economist for North America at Euler Hermes.
If there is a resurgence of COVID-19 in the coming months, it could cause more permanent job losses, said North. "That will be really dangerous for the economy, much more so than the situation we're in now."
7. Even with the last several months of job gains, there are about 11.5 million fewer Americans on nonfarm payrolls than before the pandemic began, marking a far sharper and deeper decline than in past recessions.There's still a long way for the economic recovery to go before it reaches pre-pandemic levels, and the economic outlook remains uncertain as Americans wait for further government stimulus.
Millions of out-of-work Americans had unemployment benefits slashed when the additional $600 per week expired in July, and while some are now getting $300 per week due to an executive order from President Trump, it may last only a few weeks.
In August, the Paycheck Protection Program, which likely saved millions of small business jobs also ended. At the same time, Democrats and Republicans remain deadlocked on the next potential coronavirus stimulus package.
Hopefully, the August report will reignite the debate, according to North.
from Business Insider https://ift.tt/2DuVasi
No comments