The unemployment rate fell to 8.4 percent in August, a decline of 1.8 percentage points. The number of unemployed also fell by 2.8 million people, making the number of unemployed Americans 13.6 million, according to new data released by the Bureau of Labor Statistics (BLS).
The recent data suggests that hiring and job openings have moved forward, compared to previous unemployment statistics. This sparks interest in how the U.S. job market is recovering.
The most compelling data for job market recovery during the COVID-19 pandemic is that U.S. businesses are hiring more. The current hiring statistics have gone up, numbers higher than pre-pandemic job market numbers.
From january 2018 to February 2020, U.S. employers added 5.4 million jobs. This is lower than jobs added between March and July of this year. Right at the height of the coronavirus pandemic.
How do the recent job market numbers compare with past economic downturns?
The mass layoffs and lack of jobs during the early 2000s and post 2007 economy collapse were far worse. There were certainly problems in March and April of this year, but the current job market numbers appear to be a good sign.
The slight uptick in hiring and available jobs, compared to pre-pandemic numbers, is not relevant to all industries. The industries that have seen the most increases in hiring after the pandemic include health care, retail, manufacturing, construction, and even hospitality (mainly restaurants and hotels).
These industries have seen a boost of 10 percent in job growth despite the economic twists and turns caused by COVID-19 state and federal restrictions.
Declines in jobs and hiring still affecting certain industries, but outlook is encouraging
The declines, however, have been felt by industries such as recreation and entertainment, legal, computer engineering, and more. These declines have been persistent since February. Many industries that were in decline in March and April have picked up steam with greater job opportunities and hiring in May and June.
July was a breakout month for most industries with hiring returning to pre-pandemic rates. The increase in July job market numbers could be due to the calling back of many laid-off workers. As state and federal restrictions are lifted, more workers are expected to return to their jobs.
Recent data by the U.S. Bureau of Labor Statistics highlights a decline of 16.5 million American workers who were previously classified as temporarily jobless or employed with unpaid absence. The overall employment rate rose to around 18.5 million.
Increase in hiring and job opening may be due to gap in workforce
The increase in hiring and job openings may be due to the need for more workers. There was a large spike in workers leaving jobs voluntarily due to COVID-19 concerns. Around 16 percent of Americans quit jobs in July due to coronavirus related reasons.
The industries that saw the most voluntary resignations were retail and business services. But this may be changing quickly as we approach Q4. As business travel resumes, the door for more business services, business travel, and business management opportunities will open.
Coronavirus fears have also lessened since July. There has been more willingness for Americans to return to the workforce as pandemic control measures seem to be more in place.
Children returning to schools also marks a potential rise in willingness to return to the workforce. With children and families returning to somewhat normal routines, the unemployment rate may decline further.
America’s job market still uncertain regardless of encouraging data
The metrics of joblessness and the numbers behind American workers who voluntarily dropped out of the workforce since February have similarities to the 2012 job market. This is of course not great, but a major improvement since April 2020.
The data from July and August highlights increases, but also showcases the potential for problems in the coming months. A second wave of COVID-19 is already beginning to happen across the U.S. and world. There is certainly no guarantee that the current uptick in the job market will continue.
With the pandemic still remaining a threat to Americans, the job market may see more ups and downs. The data does, however, paints a picture of fast recovery from the pandemic if improvements continue to be seen.
With an upcoming election, vaccine potential, and more state and federal COVID-19 restrictions being lifted, Americans may feel that returning to the workforce is positive. More strong signs of economic recovery will need to be seen in the coming months.