U.S. | Signs of sustained labor market momentum in August

Summary

The labor market continued to improve in August with nonfarm payrolls growing by 1.4M and the unemployment rate dropping to 8.4%. The number of persons on temporary layoff declined by 3.1M while the labor force participation edged up to 61.7%.

Key points

• Key points:
• In the last four months, nonfarm payrolls have increased by 10.6M after declining 22.M in March and April, resulting in a net drop of 11.5M since the start of the pandemic in February.
• 24.2M people were out of work due to pandemic-related business closures and 5.2M individuals reported as not in the labor force were unable to look for work due to the pandemic.
• Today’s report imprints an upside bias to our short-term forecasts and suggests that labor market conditions could normalize sooner than expected.
• However, given the magnitude of the fallout due to the pandemic, a full recovery to “maximum employment” is still likely to take time.

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