Unemployment rate continues to drop as 1.4M jobs added to payrolls in August

The nation’s unemployment rate dropped from 10.2% to 8.4% between July and August as employers added 1.4 million jobs to the economy. That is below the Great Recession high of 10% unemployment in October 2009 and a little over half of the pandemic peak of 14.7% in April. There were 23.1 million people 16 and older who were unemployed and looking for jobs in April. That total dropped to 13.6 million in August.

The reasons for unemployment are also changing. About 78.3% of people unemployed in April lost their jobs in temporary layoffs, while 45.5% of those unemployed in August cited temporary job loss.  Permanent job loss accounted for 30.6% of August unemployment, including 3.4 million people who lost year-round roles (up 534,000 from July), plus 736,000 Americans who completed temporary work.

The remaining 23.9% of unemployed workers cited reasons unrelated to job loss, like leaving a job or struggling to find work after reentering the job market or entering it for the first time.

Between April and August, employers added 10.6 million jobs to their payrolls. Around 45.1% of that growth occurred in June, with 4.8 million jobs added that month. The 1.4 million new jobs reported in August is the smallest increase reported since job numbers began to rebound in May.

Retail, plus the leisure and hospitality sector, together accounted for 55.7% of job growth since April. But the 12.7 million leisure and hospitality sector jobs reported in August are still 21.1% less than the 16.1 million jobs it had in March. Retail jobs in August were down 3.7%, from 15.6 million in March to 15 million in August.

COVID-19 cases decreased between July and August, although deaths were up. Both these numbers and jobs and unemployment statistics are critical to understanding how the nation is recovering during the pandemic.