The unemployment rate fell below 10 percent last month for the first time since the coronavirus pandemic took hold in March as the US economy added 1.4 million jobs.
The growth helped push the nation’s staggeringly high unemployment rate to 8.4 percent in August — down from 10.2 percent in July — as businesses continued to reopen following lockdowns that gutted the economy this spring, according to the Bureau of Labor Statistics’ closely watched jobs report.
President Trump touted the results on Twitter, saying that the 10 percent threshold had been broken “faster and deeper than thought possible.”
But the numbers are also raising concerns that the nation’s recovery from the coronavirus pandemic is losing steam. Monthly job growth slowed from 1.7 million in July and a record 4.8 million in June, meaning non-farm payrolls have recovered less than half the 22.1 million jobs lost in March and April as COVID-19 upended daily life.
“You’re really in a healing mode now,” Dan North, senior economist at Euler Hermes North America, told The Post. “… You can see we’ve got a long way to go and the pace of recovery is definitively slow.”
Last month’s payroll growth was in line with economists’ projections, but the unemployment rate beat expectations for a drop to 9.8 percent. August also marked the first time since March that the figure dropped below the 10 million peak seen during the Great Recession a decade ago after reaching a record high of 14.7 percent in April.
The data contained some other encouraging signs even though unemployment is still well above February’s 50-year low of 3.5 percent. The labor force participation rate ticked up 0.3 percentage points to 61.7 percent last month while the number of workers on temporary layoffs dropped to 6.2 million, roughly a third of April’s record 18.1 million.
But there was also a big red flag: 3.4 million people say they have lost their jobs permanently. That’s an increase of 534,000 from July’s level and about halfway toward the Great Recession’s peak reached in late 2009, according to economist Curt Long, who said the economy didn’t recoup those previous losses until 2017.
“If things stopped there I guess that would be OK, but we don’t think that’s going to happen,” Long, chief economist and vice president of research at the National Association of Federally-Insured Credit Unions, told The Post. “Every month that it goes up, it’s going to take kind of a grind to get that number down.”
Experts say Congress still needs to blunt the pandemic’s economic damage with more stimulus measures as further threats loom going into the fall.
Battered industries such as airlines, automakers and public transit agencies have announced plans to lay off thousands of workers as they continue to grapple with the impacts of the pandemic. The feds’ $600 weekly boost to unemployment benefits expired at the end of July, killing a key source of income for out-of-work Americans. And there’s a risk of a coronavirus flare-up as the weather gets colder, which could spark a “double-dip recession” if lockdowns come back, according to North.
“The job market broadly is something like a whirlpool, where beneath the surface there are swift cross currents including job loss,” said Mark Hamrick, senior economic analyst at Bankrate.com.
With Post wires
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