The unemployment rate dropped to 8.4 percent in August, the Labor Department reported on Friday, marking the fourth month of declines even as the pace of job growth is slowing.
The August rate is down from its April peak of 14.7 percent, but still remains far above the 3.5 percent recorded in February, before coronavirus shutdowns took hold.
The economy recovered 1.4 million jobs last month, the report showed. That’s a slowdown from the previous month’s gain of a revised 1.7 million and from the 4.8 million recovered in June.
After four straight months of growth, fewer than half of the more than 23 million jobs lost in March and April have been recovered.
“Slowing job growth is a disaster when you are 11.8 million jobs in the hole,” Heidi Shierholz, a former chief economist at the Labor Department, posted on Twitter Friday. “This is not the V-shaped recovery that could get us out of this crisis in a reasonable timeframe.”
The data released Friday morning are the results of a survey conducted in mid-August, reflecting some of the earliest effects since enhanced federal unemployment benefits expired at the end of July. The growth was led by rehires in retail, education, leisure and professional services. It also includes nearly 240,000 workers the government temporarily hired to work on the 2020 Census.
Economists warn the labor market may well have grown weaker since the report was conducted, however. Many expect further layoffs through the fall especially if Congress fails to pass further stimulus relief, as an expected drop in consumer spending, the expiration of a small business relief program and other factors could spur a wave of business closures across the country.
The number of permanent job losses is also rising, a signal that damage to the labor market is likely to be long-lasting. The vast majority of unemployed workers are classified as on temporary layoff, indicating they still expect to return to their previous jobs. But permanent losses climbed to 3.4 million in August, the report showed, up from July’s 2.9 million.
White House National Economic Council Director Larry Kudlow hailed the latest numbers on Friday, with the caveat that “we are not out of the woods.” He also downplayed the need for further stimulus, saying in an interview on Bloomberg TV that he believed the economy was “self-sustaining” and could survive without an immediate deal in Congress.
“We can absolutely live with it,” he said, adding, “It depends on the package. A bad package would not be helpful, a smart, good package, well-targeted would be helpful.”
The unemployment rate is dropping fastest for white workers, the report shows, while employment among minority workers is recovering at a slower rate.
The white unemployment rate for white people fell to 7.3 percent in August, the report showed, a drop of 6.9 percent from its April peak. The unemployment rate for Black people, meanwhile, stands at 13.0 percent, a drop of 3.7 percent from its April level.
This article originally appeared at Politico on September 4, 2020. Reprinted with permission.
About the Author: Megan Cassella is a trade reporter for POLITICO Pro. Before joining the trade team in June 2016, Megan worked for Reuters based out of Washington, covering the economy, domestic politics and the 2016 presidential campaign. It was in that role that she first began covering trade, including Donald Trump’s rise as the populist candidate vowing to renegotiate NAFTA and Hillary Clinton’s careful sidestep of the Trans-Pacific Partnership.
A D.C.-area native, Megan headed south for a few years to earn her bachelor’s degree in business journalism and international politics at the University of North Carolina at Chapel Hill. Now settled back inside the Beltway, Megan’s on the hunt for the city’s best Carolina BBQ — and still rooting for the Heels.