Economy: Employment Situation Report for August 2021

The Employment Situation Report for August 2021 was released by The Department of Labor's Bureau of Labor Statistics this morning:

Nonfarm Payrolls (month-to-month change)
Predicted: +800,000
Actual: +235,000

U-3 Unemployment Rate (Headline)
Actual: 5.2%
Previous Month: 5.4%
12 Months Previous: 8.4%

U-6 Unemployment Rate*
Actual: 8.8%
Previous Month: 9.2%
12 Months Previous: 14.2%

Average Hourly Earnings (month-to-month change)
Predicted: +0.3%
Actual: +0.542% (+$0.14)

Average Hourly Earnings (year-on-year change)
Predicted: +3.5%
Actual: +4.756% (+$1.18)

Average Weekly Earnings (month-to-month change)
Actual: +0.542% (+$4.79)

Average Weekly Earnings (year-on-year change)
Actual: +5.373% (+$45.32)

Civilian Labor Force Participation Rate: 61.7%
Previous Month: 61.7%
12 Months Previous: 61.7%

Average Workweek
Predicted: 34.7 hours
Actual: 34.7 hours

Economist, academics, central bankers and investors pay very close attention to the monthly Employment Situation report as it offers penetrating insight as to the current and near-future state of the overall U.S. economy. If a) Americans are earning more money and b) the economy is creating new jobs, this typically translates to more money being pumped into the economy (and vice versa.)

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

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From Today's Report:

"...In August, 13.4 percent of employed persons teleworked because of the coronavirus pandemic, little changed from the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.

In August, 5.6 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic -- that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is up from 5.2 million in July. Among those who reported in August that they were unable to work because of pandemic-related closures or lost business, 13.9 percent received at least some pay from their employer for the hours not worked, up from 9.1 percent in the prior month. Among those not in the labor force in August, 1.5 million persons were prevented from looking for work due to the pandemic, little changed from July. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.) These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Average hourly earnings for all employees on private nonfarm payrolls rose by 17 cents to $30.73 in August, following increases in the prior 4 months. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.99. The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings. In August, the average workweek for all employees on private nonfarm payrolls was 34.7 hours for the third consecutive month. In manufacturing, the average workweek fell by 0.2 hour over the month to 40.3 hours, and overtime remained at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.2 hours. The change in total nonfarm payroll employment for June was revised up by 24,000, from +938,000 to +962,000, and the change for July was revised up by 110,000, from +943,000 to +1,053,000. With these revisions, employment in June and July combined is 134,000 higher than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)..."

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CHART: Nonfarm Payroll Employment
August 2021 Update

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CHART: U-3 (Headline) Unemployment Rate
August 2021 Update

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* = The U-6 Unemployment Rate is defined as:

"Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force."

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