Directly on par with economic expectations, the Bureau of Labor Statistics found that the economy restored 1.4 million jobs in August. But far exceeding expectations is the unemployment rate, which has abruptly fallen to 8.4%.
H/T: Washington Examiner
That comes after the Congressional Budget Office's April projection anticipating double-digit unemployment would stay with us for all of this year and next. The Federal Reserve predicted in June that unemployment would be at 9.3% by the year's end. And just before this report's release, experts anticipated our unemployment rate would fall to 9.8%, more than a full point higher than the BLS's actual result.
“These jobs numbers reflect a big win for American workers, and are a welcome surprise considering the unemployment insurance claims have barely been budging in recent weeks,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Unemployment breaking the 10% barrier so decisively is a big psychological lift as well.”
More from Barron's via MarketWatch:
Nonfarm payrolls increased 1.4 million in August, the Labor Department said Friday, matching economists’ expectations and following gains of 2.7 million, 4.8 million, and 1.8 million in May, June and July, respectively. The temporary hiring of 238,000 Census 2020 workers helped boost payrolls.
The U-3 unemployment rate, meanwhile, dropped to 8.4% from 10.2% in July. The decline was much bigger than anticipated—economists polled by FactSet expected a 9.8% rate—and it marks the first sub-10% print since the coronavirus crisis began. An increase in the labor-force participation rate, by 0.3% to 61.7%, makes the decline in unemployment even better.
The August report gave stocks a lift in early trading. Futures on the S&P 500, down 0.3% heading into the report, rose 0.1% in its wake. Dow Jones Industrial Average futures, up 0.2% before the data, gained 0.5% as investors digested the report.
Great Jobs Numbers! 1.37 Million Jobs Added In August. Unemployment Rate Falls To 8.4% (Wow, much better than expected!). Broke the 10% level faster and deeper than thought possible.— Donald J. Trump (@realDonaldTrump) September 4, 2020
Unemployment rate dips below 10% for first time in pandemic era: Barron's on MW https://t.co/T2ZsjHQewI— MarketWatch (@MarketWatch) September 4, 2020
WATCH: The Great American Comeback is underway!— Jonathan Turcotte - Text TRUMP to 88022 (@Turcotte_JPT) September 4, 2020
"8.4% is the new unemployment rate. That was a dramatic drop in the unemployment rate...This is a solid report pointing to continued recovery in the economy and in employment." pic.twitter.com/Kdm8cuVC8N
Former Obama economic advisor admits unemployment is “lower even than I thought it would be at the end of the year.”— Trump War Room - Text TRUMP to 88022 (@TrumpWarRoom) September 4, 2020
With 1.4 MILLION jobs created in August, the Great American Comeback continues under President @realDonaldTrump! pic.twitter.com/1kwIQH6Roe
Unemployment beats expectations but AP frames this as "slowed" to 1.4 million? https://t.co/yRbr9rtuqi— Laura Ingraham (@IngrahamAngle) September 4, 2020
This jobs report is incredible. The Fed predicted that unemployment would fall to 9.3% by the end of 2020.— Andrew Clark (@AndrewHClark) September 4, 2020
It just hit 8.4% and its only August.https://t.co/OYKnCPqaPl
Bad news for Team Biden. Good news for America.— Arthur Schwartz (@ArthurSchwartz) September 4, 2020
CNBC Reports: “Big decline” in unemployment rate, unemployment lower across demographics. pic.twitter.com/EhZhudOFOG