The economy added around 1.4 million jobs last month, reflecting a slow return to labor market growth, according to data released on Friday by the Bureau of Labor Statistics.
The unemployment rate fell into the single digits for the first time since the pandemic began, dropping from 10.2 percent to 8.4 percent, the monthly report showed. Before the coronavirus' stranglehold on the economy, the rate was at 3.5 percent, the lowest in five decades.
"Great Jobs Numbers!" President Donald Trump tweeted on Friday morning after the numbers were released. "1.37 Million Jobs Added In August. Unemployment Rate Falls To 8.4% (Wow, much better than expected!). Broke the 10% level faster and deeper than thought possible."
"We have had three huge months of job gains, but so far have regained less than half of the losses in March and April," said Dan North, senior economist at Euler Hermes North America. "Job gains so far have probably been the easy ones to get, where a business opened back up and brought back in its employees."
The payrolls report is the first one issued since the CARES Act expired — along with its $600 in additional weekly unemployment benefits. Lawmakers continue to debate the finer points of a further coronavirus fiscal aid package, with some Republicans expressing concern that the "generous" unemployment stipend acts as a deterrent to those who would otherwise be attempting a return to the workforce.
The Federal Reserve noted in its most recent Beige Book on economic conditions that businesses who were looking to add employees found "day care availability, as well as uncertainty over the coming school year and jobless benefits" were the main factors impeding rehirings.
Friday's closely watched jobs snapshot comes on the heels of a decline in weekly initial jobless claims that showed 881,000 people filed for first-time unemployment benefits last week. While that's down from the pandemic peak of almost 7 million, it still indicates an elevated level far above the previous average of 200,000 claims a week.
Layoff announcements have ramped up in recent days, with airlines warning of tens of thousands of layoffs as government aid expires, and Paycheck Protection Program funds dwindle for many business owners. United Airlines said on Wednesday it expected to separate more than 16,000 workers. Ford is slashing 1,400 white-collar workers and pushing for early retirement, and e-cigarette maker Juul is axing half its 2,200-strong workforce amid a retreat from some markets.
The sluggish pace of economic recovery hit the stock market on Thursday, after a slew of disappointing economic data sparked a sell-off that included many of the highly valued tech stocks that have driven the market to multiple record highs since the pandemic began. Apple alone lost $180 billion on Thursday, the biggest one-day loss on record for any company.
On Tuesday, the Labor Department issued a projection that the pace of job gains over the next decade would slow considerably, predicting that just 6 million new jobs would be created during the period of 2020-29. While that growth rate does not include the impact from the coronavirus, it does note that the virus is likely to create “new structural changes to the economy."