Government Census Workers, Retail, Education and Health Lead August Job Growth

U.S. employers added 1.37 million jobs in August, down from the spurts of new jobs and rehires seen in June and July. With about half of the originally 22 million displaced workers (due to Covid-19) back at work, we now have about 11.5 million fewer jobs than in February, before the coronavirus crisis impacted the economy.

Revisions to previous job growth numbers indicated a small decline from the original reports. June lost 10,000 jobs to go down to a revised 4.78 million, and July decreased by 29,000 to a revised 1.73 million.

In August, the total number of persons working full-time increased by 2.8 million to 122.4 million, while the number of persons working part-time was up by 991,000 to 25.0 million. About one-fourth of the August gains were attributed to part-time workers.

During the August reporting period (which ended August 12), 24.3% of employed persons worked remotely due to the coronavirus crisis, down from 26.4% in July. Government employment accounted for one-fourth of the over-the-month gain in nonfarm employment in August with the hiring of 344,000 government workers. Most of that hiring came from the addition of 238,000 temporary 2020 Census workers, and most of those workers will be laid off when census canvassing ends later this month. There is currently a total of 328,000 workers. Local government workers increased by 95,000. Currently, government employment is 831,000 below its February level.

Private-sector payrolls rose by one million in August, down from 1.5 million in July. The retail sector added 249,000 jobs in August, with almost 116,000 hires for general merchandise stores. Other significant gains were at motor vehicle and parts dealers with 22,000 hires, electronics and appliance stores adding 21,000, and other miscellaneous retailers adding 17,000. Retail currently employs 655,000 fewer workers than in February.

Employment for professional and business services was up 197,000. More than half of the gain was from temporary help services, with an increase of 107,000. Architectural and engineering services were up by 14,000, business support services increased by 13,000, and computer systems design and related services were up by 13,000. Employment in professional and business services is 1.5 million below its February level.

Jobs in the leisure and hospitality sector increased by 174,000 in August, with about three-fourths of the gain in food services and drinking places with an uptick of 134,000. Even though the sector has seen job growth of 3.6 million over the last four months, employment for food services and drinking places is down by 2.5 million since February.

Employment in education and health services was up by 147,000 level. Health care employment increased by 75,000 with 27,000 hires for offices of physicians, 22,000 for offices of dentists, 14,000 in hospitals, and 12,000 for home health care services. In August, there were job losses of 14,000 in nursing and residential care facilities. Employment for private education increased by 57,000. Employment in education and health services is 1.5 million below February.

Job growth in transportation and warehousing was up by 78,000 with 34,000 hires in warehousing and storage, 11,000 for transit and ground passenger transportation, and 10,000 in truck transportation. Employment in the transportation/warehousing sector is down by 381,000 since February.

The other services industry added 74,000 jobs in August, with 31,000 hires in membership associations and organizations, 29,000 for repair and maintenance, and 14,000 for personal and laundry services. Employment in this category is down by 531,000 from February.

Financial activities added 36,000 jobs in August, with 23,000 hires in real estate and rental and leasing. Employment in the financial activities sector is down by 191,000 since February. Manufacturing employment rose by 29,000, with 27,000 hires in nondurable goods. Employment in manufacturing is down by 720,000 since February.

Employment in wholesale trade was up by 14,000, with 9,000 of those hires in the nondurable goods component. Wholesale trade jobs are down by 328,000 since February. During August, employment changed little in mining, construction, and information services.

The unemployment rate fell sharply to 8.4% from 10.2% in July. The total of those on furlough was also down. There were 24.2 million people who said they were not working because their employer either closed or lost business due to the Covid-19 crisis, down from 31.3 million in July. Permanent job losses increased from 534,000 to 3.4 million.

About 45% of unemployed workers said they were on temporary layoff, down from 56% the previous month. Americans on temporary layoff fell by 3 million in August to 6.1 million as more laid-off workers were called back. At the same time, the number of workers permanently laid off was up by 2.9 million to 3.4 million, possibly due to some temporary layoffs becoming permanent. More than 8 million Americans have been unemployed for 15 weeks or more.

The number of persons employed part-time due to economic reasons (involuntary part-time workers) went down by 871,000 to 7.6 million in August. The number of involuntary part-time workers is 3.3 million higher than in February.

In August, the number of persons not in the labor force who currently want a job declined by 747,000 to 7.0 million, 2.0 million higher than in February. The number of discouraged workers who believe there are no jobs available for them decreased by 130,000 in August to 535,000.

About 5.2 million persons not in the labor force in August were prevented from looking for work due to the crisis, down from 6.5 million in July. (To be counted as unemployed, by definition, individuals must either be actively looking for work or on temporary layoff.)

Take a look at the infographic below for more info on the August job market.


Tony Bedikian, head of global markets at Citizens Bank, believes, “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. We continue to be optimistic that the economy has turned a corner and that we’ll continue to see steady progress.”

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Mike Temkin

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