August Jobs Report Continues to Project a Mixed Bag for the Economy

• Author: Jacob Greene
• Posted: 2024-08-24

The August jobs report is in, painting a picture of an economy still struggling with the ongoing COVID-19 health crisis. While the economy added 1.4 million jobs last month, this number is still well short of the rate of additions in the previous months. Here is a detailed look at the August jobs report, the winners and the losers, and what it means for the economic recovery efforts.

Looking at the Numbers

According to the Friday report by the US Bureau of Labor Statistics, the economy added 1.4 million jobs in August. While this number may seem like a massive amount, the figure marks a significant slowdown in growth when compared to data earlier in the summer. June saw the biggest increase as the economy began to reopen nearly everywhere, demonstrating a growth of 4.8 million jobs that month. Employers added 1.7 million jobs in July.

While these figures may seem like a massive amount of new jobs, it is important to remember that the country is still down 11.5 million jobs since February. Another troubling sign is that permanent job losses rose by over 500,000 to land at 3.4 million. In addition, over 8 million individuals have been without work for longer than 15 weeks.

Beating Expectations

The good news is that this number was slightly higher than the 1.32 million estimates that those polled by Dow Jones had predicted. In addition, the unemployment rank shrank to 8.4%. This number far exceeded the 9.8% rate that economists had expected. Although this unemployment rate is still exceptionally high, it is a far cry from the record-breaking 14.7% rate that the country saw in April. Since that time, the economy has slowly been adding jobs back as states have begun the delicate reopening process. The August unemployment rate marks the first time since March that the number was below 10%.

Job Losses Not Split Evenly Among Ethnic Groups

The unemployment rate improvement was not consistent across different ethnic groups. While the White population unemployment rate is only at 7.3%, other groups have not seen as much improvement. Black workers are still seeing the highest level of unemployment, sitting at 13% for the month of August.

Where Are the Jobs?

As has been typical with this economic recovery, the job growth has been centered in different industries every time a new report has been released. The big winner in August was the government sector, adding 344,000 jobs in the month alone. This huge gain was largely attributed to the hiring of 238,000 temporary workers for the 2020 Census. This hiring spree is expected to continue through September. However, the workers will eventually all be let go when the Census wraps up.

Retail trade added the second-highest number of jobs, coming in with 249,000 new positions. Of that number, nearly half happened in general merchandise stores. This includes warehouse clubs and department stores. Motor vehicles and parts dealers saw a significant gain of 22,000 jobs. Electronics and appliance stores also saw a substantial increase with the addition of 21,000 jobs.

The job additions in these specific industries reflect the nation's resumed consumption of goods and services as the economy continues to attempt to get back up on its feet after being decimated by the COVID-19 virus.

Government Aid Still Needed

Despite the continuing job growth, there are still millions of Americans struggling financially as a result of the COVID-19 pandemic. Congress has yet to come to an agreement about a new round of stimulus aid. While Congress was quick to act in March to pass legislation providing vast economic relief, these provisions expired at the end of July. A recent mandate by the White House put the onus on states to provide additional unemployment benefits, however, this money is short of the extra $600 per week that had been provided by the earlier stimulus package.

Economists are heeding the warnings from health experts that predict a possible second wave of the COVID-19 virus this fall. Should this occur, the current job growth trajectory will be stimied if states have to roll back reopening plans.