In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Friday, September 04, 2020

Comments on August Employment Report

by Calculated Risk on 9/04/2020 09:21:00 AM

The labor market swings have been huge, and the August employment report was at expectations of 1.4 million jobs added, although private employment was below expectations.

Leisure and hospitality added another 174 thousand jobs in August, following 4 million jobs added in May, June and July. Leisure and hospitality lost 8.3 million jobs in March and April, so about 50% of those jobs were added back in May, June, July and August.

Earlier: August Employment Report: 1.4 Million Jobs Added, 8.4% Unemployment Rate

In August, the year-over-year employment change was minus 10.25 million jobs.

As expected, there were 238 thousand temporary Decennial Census workers hired (and included in this report). These jobs will be lost in a few months. "A job gain in federal government (+251,000) reflected the hiring of 238,000 temporary 2020 Census workers."

Permanent Job Losers

Year-over-year change employmentClick on graph for larger image.

This graph shows permanent job losers as a percent of the pre-recession peak in employment through the August report. (ht Joe Weisenthal at Bloomberg)

This data is only available back to 1994, so there is only data for three recessions.

In August, the number of permanent job losers increased sharply to 3.411 million from 2.877 million in July.

Prime (25 to 54 Years Old) Participation

Employment Population Ratio, 25 to 54Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The prime working age will be key in the eventual recovery.

The 25 to 54 participation rate increased slightly in August to 81.4%, and the 25 to 54 employment population ratio increased to 75.3%.

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:

"The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 871,000 to 7.6 million in August, reflecting a decrease in the number of people who worked part time due to slack work or business conditions (-1.1 million)."
The number of persons working part time for economic reasons decreased in August to 7.572 million from 8.443 million in July.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 14.2% in August. This is down from the record high in April 22.8% for this measure since 1994.

Unemployed over 26 Weeks

Unemployed Over 26 WeeksThis graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.501 million workers who have been unemployed for more than 26 weeks and still want a job.

This will increase sharply in September or October - since the largest number of layoffs were in April - and will be a key measure to follow during the recovery.


The headline monthly jobs number was at expectations but the previous two months were revised down 39,000 combined.  The headline unemployment rate decreased to 8.4%.