U.S. employers added 1.4 million jobs in August and the unemployment rate fell to single digits for the first time since the pandemic crippled the economy, the Labor Department said Friday. But the pace of hiring continued to slow while the number of Americans without jobs remained high.
The unemployment rate fell 1.8 percentage points to 8.4%. That’s down from a peak of 14.7% in April and below the peak during the Great Recession a decade ago. The unemployment rate was 3.5% in February before governments shut down businesses to slow the spread of the coronavirus.
“The job market continues to recover, but it is an increasingly slow recovery, and it is a long way from returning to its pre-pandemic strength,” said Mark Zandi, chief economist at Moody’s.
Friday’s report showed employers continued to bring back workers at high levels but at a slower pace. August was the fourth-straight month of job gains, but the slowest pace of hiring over that period. The nation has recovered about half of the 22 million jobs lost in March and April. It still has 11.5 million fewer jobs than in February and mass layoffs persist, according to the Labor Department.
An additional 881,000 Americans applied for unemployment assistance last week. Some of the nation’s biggest employers among the hardest hit sectors, such as MGM Resorts International and American Airlines, are making staff reductions or warning that layoffs could be on the way.
Meanwhile, the federal government has yet to pass another rescue package to aid America’s unemployed. The $600-per-week jobless benefit expired in July, leaving many worried about affording rent, food, and other bills. The Trump administration is providing $300 per week in extra help, but not all the unemployed will qualify and those who do must wait weeks to get it.
Zandi said that the economic recovery would slow substantially if Washington doesn’t pass another aid package soon. “The millions of unemployed and underemployed will have no choice but to stop paying their bills,” Zandi said.
Government hiring increased by 344,000 in August, largely reflecting temporary hiring for the 2020 Census, the Labor Department said. About 249,000 people were hired or rehired in retail, 197,000 in professional and business services, and 174,000 in leisure and hospitality.
The unemployment rates dropped for adult men (8%), adult women (8.4%), teenagers (16.1%), whites (7.3%), Blacks (13%), and Hispanics (10.5%). The jobless rate for Asians (10.7%) changed little over the month, the Labor Department said.
“This was a strong report that shows the recovery remains on track,” said Joel Naroff, president of Naroff Economic Advisors, a strategic economic consulting firm in Bucks County. “The labor market has come back faster than expected, and we are seeing improvement in all segments of the economy and the workforce.”
Both states recently received federal approval to give eligible workers the $300 a week in extra aid. But jobless workers have had to wait weeks to get paid because the money comes from a temporary program funded by the Federal Emergency Management Agency, not traditional unemployment insurance. States need to build new systems and processes to distribute payments.
Pennsylvania officials said Friday that workers could get payments as early as Sept. 14, while New Jersey officials said checks may hit bank accounts in October. Payments will be made retroactively to August.
Since there is just $44 billion behind the program and workers have already waited a month, they’ll likely get a lump-sum check or two, said Andrew Stettner, a senior fellow at the New York-based think tank Century Foundation.
“It’s nothing like unemployment benefits, which once you get it, you can count on it week after week,” said Stettner, who has studied unemployment benefits for 20 years. " You’re probably going to get only one or two lump sums. It will help you pay back bills or pay your late rent, but it’s not something you can really count on to meet all of your needs.”
One worker waiting for aid is Lori Aghazarian, a Walnut Street Theatre stage manager who was laid off in March. With the extra $600 per week gone, Aghazarian said she’d spend her savings to get by. The 47-year-old from South Philly now faces the task of finding a new career after three decades in theater.