The US economy gained nearly 1.4 million jobs in August, making it the fourth month in a row of over 1 million jobs added. The unemployment rate dropped to 8.4% as lockdown pressures are starting to wear off and the economy bounces back towards normal levels of output.
The Private Sector Job Quality Index (JQI) produced by the Coalition for a Prosperous America (CPA) and its partners did fall, however. This time down 0.4% to 83.26 on a 100 scale as more service sector jobs were added to the mix this month. The decline in the JQI reflects the fact that more low-quality, i.e. low-wage and low-hour, jobs are being added back to the economy. They were the ones that were hit hardest in the early months of the pandemic.
August job numbers were also thanks to an increase in government temporary hiring for the 2020 Census. But other notable job gains singled out by the Bureau of Labor Statistics today were in retail, professional and business services, leisure and hospitality, and in education and health services. Manufacturing jobs rose by a small 29,000 and remain 720,000 jobs below the pre-pandemic levels.
The mean weekly wage income of all lower-paying jobs as of the current reading declined to $833.84, a change of -0.40% from its revised level the month prior. This reflects the large number of previously-eliminated low-wage/low hours jobs now being added back to payrolls through July.
“We are seeing real progress in recovering from the COVID economic shutdown, but the US needs to seize the opportunity to reshore US manufacturing production. Yesterday’s bad trade figures show that the trade deficit remains a huge problem for the economy and the job market. We must take steps to reduce our import dependence so we are self-reliant and resilient in key industries. If we meet more US demand for goods with US production, that will lead to more jobs and higher-paying jobs,” says CPA chief economist Jeff Ferry.
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