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Friday, September 02, 2022

Comments on August Employment Report

by Calculated Risk on 9/02/2022 09:16:00 AM

The headline jobs number in the August employment report was above expectations, however employment for the previous two months was revised down by 107,000, combined.   The participation rate increased, pushing up the unemployment rate to 3.7%.  And the employment-population ratio increased slightly. 

Leisure and hospitality gained 31 thousand jobs in August.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.20 million jobs, and are now down 1.12 million jobs since February 2020.  So, leisure and hospitality has now added back about 85% all of the jobs lost in March and April 2020. 

Construction employment increased 16 thousand and is now 84 thousand above the pre-pandemic level. 

Manufacturing added 22 thousand jobs and is now 67 thousand above the pre-pandemic level.

Earlier: August Employment Report: 315 thousand Jobs, 3.7% Unemployment Rate

In August, the year-over-year employment change was 5.84 million jobs.

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 25 to 54 participation rate increased in August to 82.8% from 82.4% in July, and the 25 to 54 employment population ratio increased to 80.3% from 80.0% the previous month.

Both are close to the pre-pandemic levels and indicate almost all of the prime age workers have returned to the labor force.

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:
"The number of persons employed part time for economic reasons was little changed at 4.1 million in August. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full- time jobs."
The number of persons working part time for economic reasons increased in August to 4.149 million from 3.924 million in July. This is below pre-recession levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.0% from 6.7% in the previous month. This is down from the record high in April 22.9% for this measure since 1994. This measure is at the same level as in February 2020 (pre-pandemic).

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 1.137 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.067 million the previous month.

This is back to pre-pandemic levels.


The headline monthly jobs number was above expectations; however, employment for the previous two months was revised down by 107,000, combined.  

The headline unemployment rate increased to 3.7% due to the increase in the participation rate.

Overall, this was another solid employment report.