Jobless rate falls to 8.4% in August

The U.S. labor-market rebound extended for a fourth month in August, offering hope that the economy can continue to recover despite a persistent pandemic and Washington’s standoff over further government aid to jobless Americans and small businesses.

Non-farm payrolls increased by 1.37 million, including the hiring of 238,000 temporary Census workers, according to a Labor Department report Friday. The unemployment rate fell by more than expected, by almost 2 percentage points, to 8.4%.

Yields on 10-year Treasuries rose after the report, while U.S. stock futures reversed losses and the dollar fluctuated.

The median estimates in a Bloomberg survey of economists called for a 1.35 million gain in non-farm payrolls and an unemployment rate of 9.8%.

The data signal progress in the labor market is continuing though at a more moderate pace since the initial bounce back in hiring, with payrolls remaining about 11.5 million below the pre-pandemic level. The pace of further gains likely hinges on whether America improves control of coronavirus infections, as well as an end to the stalemate in Congress over another stimulus package.

The payroll figures showed broad-based gains across industries. Retail added about 249,000 jobs, more than in the prior month, while professional business services increased by 197,000, and transportation and warehousing was up about 78,000.

But the gains in leisure and hospitality businesses, such as restaurants, that had driven prior months cooled significantly in August with a rise of 174,000, compared with 621,000 in July.

Adjusted for the misclassification of workers who should have been labeled as unemployed — a problem plaguing the data in recent months — the jobless rate would have been 0.7 percentage point higher in August, the Labor Department said.

The report also showed a strong gain in one key figure, the employment-population ratio, which jumped 1.4 percentage points to 56.5%, though that’s still well below February’s level of 61.1%.

The much better-than-expected improvement in the jobless rate spanned demographic groups, though white and Hispanic Americans saw larger declines in the rate compared with Asian and Black Americans.

The gender gap also narrowed. Among adult women, the unemployment rate fell 2.1 percentage points to 8.4%, compared with a 1.4-point drop among men, to 8%.