by N. Peter Kramer
US employers added 1.4 million jobs in August, sending the unemployment rate back below the peak of the global financial crisis to 8.4% . Also the labour market rebound advanced in the world’s largest economy. Businesses last month continued to rehire workers they shed during the pandemic, albeit at a weaker pace than in July, according the US Bureau of Labor Statistics. This monthly release of the US labour department has a clear political significance, it is the penultimate reading on the labour market before the presidential election in November.
Retail added 249.000 jobs; the manufacturing sector 29.000; leisure and hospitality 174.000; healthcare and education 147.000. The government jobs rose 344.000 on the back of the consensus-related hiring. There is a slowdown in hiring after July, a month that showed a peak in hiring. Interesting is now to see how it the labour market develops after the holiday month of August. Overall, the US economy has regained about 10.6 million of the 22.2 jobs lost during March and April.
The rebound has been held back by the fading effects of the enormous fiscal stimulus. But Congressional leaders and the White House are already talking about a new round of fiscal stimulus, which economists believe is crucial for a further recovery of the economy. A difficult time for talks like this, especially for the Democrats. They know that further positive developments will give, in the first place, a boost to President Donald Trump.
Anyhow, American economists are positive. ‘While there is a bit of a slowdown in hiring, once you strip out the census numbers, this is still a positive surprise’, the chief economist of Fitch Ratings called it. His colleague at Ameriprise said, ‘this does show incremental improvement’.