U.S. unemployment falls to 8.4% as employers add 1.4 million jobs

The U.S. unemployment rate fell sharply in August, to 8.4%, from 10.2% in July, even as the pace of hiring slowed, with employers adding the fewest jobs since the pandemic began.

Employers added 1.4 million jobs, the Labor Department said Friday, down from 1.7 million in July. The U.S. economy has recovered about half of the 22 million jobs lost to the pandemic.

The drop in the unemployment rate was much better than expected, with economists predicting it would fall to 9.8%.

The number of jobs added met or slightly exceeded expectations.

Friday’s report from the Labor Department added to evidence that nearly six months after the coronavirus paralyzed the country, the economy is mounting only a fitful recovery. From small businesses to hotels, restaurants, airlines and entertainment venues, a wide spectrum of companies are struggling to survive the loss of customers while confirmed viral cases remain high.

After an epic collapse in the spring, when the economy shrank at a roughly 30% annual rate, growth has been rebounding as states have reopened at least parts of their economies. Yet the recovery remains far from complete.

The payroll figures showed broad-based gains across industries. Retail added about 249,000 jobs, more than in the prior month, while professional business services increased by 197,000 and transportation and warehousing was up about 78,000.

But the gains in leisure and hospitality businesses, such as restaurants, that had driven prior months cooled significantly in August with a rise of 174,000, compared with 621,000 in July.

The much better-than-expected improvement in the jobless rate spanned demographic groups, though White and Hispanic Americans saw larger declines in the rate compared with Asian and Black Americans.

The gender gap also narrowed. Among adult women, the unemployment rate fell 2.1 percentage points to 8.4%, compared with a 1.4-point drop among men, to 8%.

Many economists think significant hiring may be hard to sustain because employers are operating under a cloud of uncertainty about the virus. Daily confirmed case counts have fallen from 70,000 in June to about 40,000. The decline has leveled off in the past week and the viral caseload remains higher than it was in May and June.

As a result, activities like restaurant dining and air travel are still far below pre-pandemic levels. Most economists say a meaningful economic recovery will likely be impossible until the coronavirus is brought under control, most likely from the widespread use of a vaccine.

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