Chart of the Day: Net New Jobs in August


The American economy added 169,000 new jobs last month, but about 90,000 of those jobs were needed just to keep up with population growth, so net job growth clocked in at 79,000. That’s about the same as last month—except for the fact that last month’s numbers got revised sharply downward today. Net job growth in July was reduced from 72,000 to 14,000, barely the breakeven point, and just for good measure, June’s numbers were revised down a bit too.

The headline unemployment number declined slightly to 7.3 percent, but for the worst possible reason. It’s not that more people were at work in August. In fact, fewer people were employed than in July. Normally this would produce a lower employment rate (and therefore a higher unemployment rate), but because lots of people exited the labor force entirely, the size of the civilian labor force dropped by 312,000 people. Here’s how the employment arithmetic works out:

July: 144,285 / 155,798 = 92.61%

August: 144,170 / 155,486 = 92.72%

So there are fewer people working, but because the size of the labor force dropped so much, the employment rate actually went up by a tenth of a point. Likewise, the unemployment rate went down by a tenth of a point.

The question is why the labor force shrank. As it turns out, it’s not because there were more discouraged workers. There were fewer. Nor were there more people forced into part-time work because of the bad economy. There were fewer. There were more people who switched to part-time work for noneconomic reasons, but presumably that doesn’t reflect one way or the other on the state of the economy.

It’s a little bit mysterious, and maybe someone with better economic chops will explain it all later in the day. In the meantime, there’s one takeaway from this that’s simple: This is a really weak jobs report. It’s crazy that we’ve all but given up on both monetary and fiscal policy designed to fight this weakness.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate