The unemployment rate dropped into the single digits for the first time since March and the economy added 1.4 million jobs in August as a potentially long economic recovery from the early effects of the COVID-19 pandemic continues.
"We are still moving in the right direction and the pace of the jobs recovery seems to have picked up, but it still looks like it will take a while — and likely a vaccine — before we get back close to where we were at the beginning of this year," said Tony Bedikian, head of global markets at Citizens Bank, according to Fox Business. "We continue to be optimistic that the economy has turned a corner and that we'll continue to see steady progress."
Unemployment drop exceeds expectations
The unemployment rate dropped from 10.2% to 8.4% in August. Economists had projected it to drop to 9.8%. The unemployment rate was as high as 14.7% in April, when most of the United States was locked down during the peak of the COVID-19 outbreak.
The unemployment was at a decades-low 3.5% in February, before the COVID-19 lockdowns began in the U.S.
Slow(er) but steady job growth
After 2.7 million jobs added in May and another 4.8 million added in June, job growth has slowed down in the past two months, indicating the potential for a longer-term economic recovery rather than a quick bounce-back.
The economy added 1.4 million jobs in August, which follows a gain of 1.8 million in July.
In August, the retail industry added 249,000 new jobs, professional and business services added 197,000 jobs, and leisure and hospitality added 174,000 jobs.
The furlough factor
The number of people who are on temporary layoffs has continued to decline. That number dropped by 3.1 million down to 6.2 million in August, after peaking at 18.1 million in April when businesses were shutting down for an indefinite period of time in an attempt to slow the spread of COVID-19.
Some of those furloughs, however, are becoming permanent. The number of people who have gone from temporary job loss to permanent job loss rose to 3.4 million, which is an increase of 534,000.
More stimulus needed?
Congress has gotten nowhere in negotiations for another COVID-19 economic stimulus package, something President Donald Trump has repeatedly said he wanted. Democrats in the House passed a $3.4 trillion bill months ago, while Republicans and the White House want something closer to $1 trillion.