America’s employment situation saw marked improvement in August, as more states progressed in their reopenings and some of the hardest-hit business sectors — including retail and hospitality — were able to resume operations.
According to the Bureau of Labor Statistics, American employers added nearly 1.4 million jobs last month, pushing down the unemployment rate to 8.4%. That is a welcome departure from the 14.7% high seen in April, when much of the country went into lockdown to try to contain the spread of the coronavirus; however, it is still significantly higher than pre-pandemic levels, which typically hovered in the mid-3% range.
The most notable job gains came in some of the industries that saw the steepest cuts when economies shut down — including retail trade, professional services, leisure and hospitality, and education and health services.
Amanda Weinstein, professor of economics at The University of Akron explained why these industries have been hit hardest during the current recession. “Any job where you have a lot of people interaction and that’s not necessary, it just completely got cut,” she said. “These people-based, service-based industries, it’s not essential and you could spread coronavirus.”
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In August, though, as stores across the country reopened, retailers began to bring back their furloughed workers. Retail trade added 249,000 jobs in August, with almost half the growth (116,000 jobs) occurring in general merchandise stores, which include department stores, supercenters and warehouse clubs. Clothing and accessories stores added 11,100 jobs, while sporting goods, book and music retailers added 5,800 positions.
Despite these moderate gains, the U.S. economy has been slow to recover as states to continue to fight outbreaks of the coronavirus, causing companies and schools to temporarily close once again.
The federal government’s initial efforts to stimulate the economy through the CARES Act have for the most part expired, leaving little support for small businesses and the many Americans without jobs. However, President Trump did offer some temporary relief with his executive orders in early August, providing states with FEMA grants to continue to offer extra pandemic unemployment benefits.
And Trump’s payroll tax deferral commenced this week, though many economists and lawmakers question how beneficial it will be to the country’s financial recovery, and many businesses have opted not to take advantage of the tax holiday.