The US labor market data is one of the main reasons for pride of the president, Joe Biden, and one of the strengths he highlights to get away from the feared economic recession.
The unemployment rate in the United States broke its losing streak and rose two tenths in August, standing at 3.7%although the labor market of the world’s leading power remains solid, with figures close to the pre-pandemic period.
The number of unemployed increased in August by 344,000 people and reached 6 million, according to data published this Friday by the Bureau of Labor Statistics (BLS, in English).
Job creation slowed in Augustwith 315,000 new jobs, compared to more than half a million registered in July, a figure that meant a return to the levels of February 2020, prior to the pandemic, when the unemployment rate was 3.5%.
The data for August therefore represent a relative cooling of the labor market, after the good data in July.
In fact, unemployment had fallen steadily since it peaked at 14.7% in April 2020 and had only risen twice during this period, no more than one tenth.
The creation of 315,000 jobs in August is also less than the average number of jobs created between March and June, when an average of 388,000 jobs were created.
“Good news” for Biden
The excellent strength of the American labor market is one of the main points of pride for the American president, Joe Bidenand one of the strengths that stands out to get away from the dreaded economic recession.
In fact, after knowing the data, the president described them in a public intervention as “good news”.
“The great American jobs machine continues”said Biden, who recalled that since he took office in January 2021, almost 10 million new jobs have been created, with “the fastest growth in the entire history of the United States.”
The first world power entered a technical recession in the second quarter of this year, registering two consecutive quarters of falling GDP, although the Government insists that the country cannot be considered to be in recession in view of economic indicators such as that of employment.
Biden also pointed out that they are seeing each other “some signs that inflation may be starting to ease”after prices dropped six tenths in July, with an interannual rate of 8.5%.
restrictive monetary policy
Despite the president’s optimism, the cooling off comes days after the president of the Federal Reserve (Fed), Jerome Powell, acknowledged in a speech at the Jackson Hole forum that restoring price stability “will likely require” maintaining a “tight” monetary stance for some time, a situation that will have consequences in the labor market.
BLS data shows that, by sector, notable job gains occurred in professional and business services, health care, and retail.
By population groups, the unemployment rates for adult men (3.5%) and Hispanics (4.5%) increased in August, while the unemployment rate for adult women (3.3%), adolescents (10, 4%), White (3.2%), Black (6.4%) and Asian (2.8%) showed little change over the month.
Among the unemployed, the number of people who lost permanent employment increased by 188,000 and reached 1.4 million in August. The number of temporary unemployed persons remained virtually unchanged at 782,000.
The number of long-term unemployed (those out of work for 27 weeks or more) was little changed, standing at 1.1 million in August. The long-term unemployed represent 18.8% of all the unemployed.
Since May 2020, the BLS has also been asking follow-up questions to help gauge the effects of the coronavirus pandemic on the labor market on topics such as telecommuting.
Thus, 6.5% of employed people teleworked in August due to the pandemic, compared to 7.1% the previous month.
Additionally, 1.9 million people reported that they had been unable to work because their employer closed or lost business due to the pandemic, down from 2.2 million in July.
Among those not in the labor force in August, 523,000 people were unable to look for work due to the health crisis, little changed from the previous month.