August Jobs Report
A Fourth Month of Upside Surprises
Key Takeaways
- US nonfarm payrolls rose by 1.37 million jobs in August, a bit stronger result than the consensus median forecast of a 1.35 mm gain, and building on July’s 1.76 mm gain.
- Strong gains were recorded in retail (+249,000 jobs), professional and business services (+197,000), leisure and hospitality (+174,000), and education and health services (+147,000). Temporary hiring for the 2020 Census added 238,000 jobs.
- The unemployment rate eased to 8.4%, a better result than the 9.8% median forecast and an improvement from July’s 10.2% rate.
- In August, 24.3% of employed people teleworked due to the pandemic, down from 26.4% in July.
- In total, employment in August stood about 11.5 million jobs (or 7.6%) below the levels achieved in February, when the US economy was at full employment.
In our view, these better than expected figures in the payroll survey point to the durability of the economy, suggesting that firms and workers are both eager to return to pre-crisis production levels even as resurgences in the novel coronavirus complicate the re-opening process. Complicating matters further, the stalemate in Washington over the next rescue package presents a negative risk to the economic outlook and to the magnitude of further gains in months ahead.
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