United States Economy Brought Back Only 1.4 Million Jobs in August
Last month, more Americans headed back to work as the United States continued reopening efforts. According to the latest report from the Bureau of Labor Statistics, nonfarm payrolls increase by 1.4 million in August. In turn, the unemployment rate fell from 10.4% to 8.4%. Unfortunately, despite the latest gains, the U.S. economy has still seen a net loss of 11.5 million jobs since the COVID-19 pandemic hit earlier this year.
August’s 1.4 million followed a revised 1.7 million jobs in July and 4.8 million that came back online in June. This trend leaves concern that the speed with which jobs are returning has slowed. Nevertheless, the report was celebrated by President Trump, who tweeted this morning, “Great Jobs Numbers!,” adding, “Unemployment Rate Fall To 8.4% (Wow, much better than expected!). Broke the 10% level faster and deeper than thought possible.” It goes without saying that the President has been heralding recovery efforts as he seeks reelection in November.
In terms of what sectors gained the most jobs, a quarter-of-a-million came from retail as businesses continue to reopen. Meanwhile the Federal Government also added 250,000 jobs, with 238,000 of those being temporary positions related to the 2020 census. Overall, private-sector hiring increased by 1 million during the month.
With the new figures now in, attention now turns back to Congress, which has yet to reach a deal on another potential stimulus package. On that front, Marketwatch spoke with analysts who are bearish on the notion that another package would be passed prior to the November election. As Naroff Economics president and chief economist Joel Naroff explained, “For those who, after having voted to explode the budget deficit, have suddenly remembered that they don’t like government welfare payments, this report could strengthen their resolve to deny another package gets passed, since the need is not nearly as great as it had been.” Elsewhere, Veda Partners director of economic policy research Henrietta Treyz told clients, “We are formally dropping our odds of another $1.5T+ stimulus package this morning from their previous 60-75% rate to 20-30%.”
While it was once believed that the nation could quickly eradicate the coronavirus and bring the economy right back to where it left off, that dream has been slipping further away. Meanwhile, the advances that have been made are being viewed through two different lenses — one that hinders the possibility of further relief and one that sees even more reason for it. With the 2020 presidential election now less than two months away, these interpretations are likely to only grow more polarized. Regardless, it’s worth keeping an eye on these monthly reports and considering the full picture.