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BLS Employment Situation Report: August 2020

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Showing signs that the U.S. economy is settling in for a slow and steady recovery after a three month stretch of a rapid rebound, the U.S. economy added 1.4 million non-farm jobs in August and unemployment fell to 8.4 percent in U.S. Bureau of Labor Statistics (BLS) data reported today. The job growth slightly exceeded economist forecasts and represents a solid gain but the smallest in four months.

“Today’s report reinforces the cautious optimism our Network of over 325 executive recruitment offices have about ongoing demand for top talent through the balance of 2020,” said Bert Miller, president and CEO of MRINetwork. “The positive momentum in U.S. job creation reinforces our Network’s decision to invest in the digital tools and education that talent advisory and search firms need in the changing world of work to accelerate growth in their businesses.”

The BLS reported total non-farm employment rose by 1.4 million in August, and the number of unemployed persons fell by 2.8 million to 13.6 million. Both measures have declined for four consecutive months but are higher than pre-virus February by 4.9 percentage points and 7.8 million, respectively. The labor force participation rate increased by 0.3 percentage point to 61.7 percent in August,1.7 percentage points below the February period.

“We are still moving in the right direction and the pace of the jobs recovery seems to have picked up, but it still looks like it will take a while – and likely a vaccine – before we get back close to where we were at the beginning of this year,” said Tony Bedikian, head of global markets at Citizens Bank in comments to Fox Business.

In August, 24.3 percent of employed persons teleworked because of the coronavirus, down from 26.4 percent in July indicating an uptick in the rate of return to a workplace environment.

According to the BLS, notable job gains in August included government employment, largely reflecting temporary hiring for the 2020 Census. Notable job gains also occurred in retail trade, in professional and business services, in leisure and hospitality, and in education and health services.

“Employment growth is still set to lag the recovery in broader economic activity over the coming months given its greater exposure to the services sectors worst affected by the pandemic,” noted Andrew Hunter, senior U.S. economist at Capital Economics in comments to CNBC. “Nevertheless, the August data illustrate that, despite the earlier surge in virus cases and more recent fading of fiscal support, the recovery continues to plow on.”

Employment in government increased by 344,000 in August, accounting for one-fourth of the over-the-month gain in total nonfarm employment. Job gains in federal government (+251,000) reflected the hiring of 238,000 temporary 2020 Census workers. Local government employment rose by 95,000 over the month. Overall, government employment is 831,000 below its February level.

Retail trade added 249,000 jobs in August, with almost half the growth occurring in general merchandise stores (+116,000). Notable gains also occurred in motor vehicle and parts dealers (+22,000), electronics and appliance stores (+21,000), and miscellaneous store retailers (+17,000).

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