US unemployment decreases in August

US companies added 1.4 million jobs in August and the unemployment rate fell to 8.4 percent, the lowest since March, the Bureau of Labor Statistics (BLS) reported Friday.

Economists surveyed by Dow Jones expected the unemployment rate to dip to 9.8 percent. In July, the unemployment rate was 10.2 percent.

"These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it," the BLS said in a statement.

The unemployment rate has declined steadily from about 15 percent in April at the beginning of the lockdown and is now below the peak of the 2007-2009 recession.

But joblessness is still significantly higher than pre-pandemic levels. In February, the unemployment rate was 3.5 percent, a 50-year low.

Government hiring, especially temporary workers to conduct the 2020 census, helped boost total job growth.

Government added 344,000 jobs in August, including 328,000 census workers.

The US conducts a census every 10 years. Each state's representation in the House of Representatives is based on population. States gain or lose seats in the House based on the count.

The number of furloughed workers also declined in August.

The BLS said 24.2 million people said they remained at home because their employer had closed or lost business during the coronavirus pandemic, down from 31.3 million in July.

Friday's report came amid other encouraging signs of an economic recovery, including rebounding retail and real estate sales as well as increased manufacturing activity.

But some economists believe the rebound will stall without additional federal stimulus. A strong economy is key to US President Donald Trump's re-election prospects.

Democrats and Republicans disagree about the scope and amount of the next round and the House adjourned in August without reaching an agreement.

Democrats believe the extra $600 per week in unemployment benefits should be extended to help those out of work pay their bills, but Republicans argue the increased payment is a disincentive to return to work and therefore will slow the recovery.

The retail sector added 249,000 jobs, profession and business services added 197,000 and leisure and hospitality, pounded during the pandemic as bars and restaurants shut down, gained 174,000, the BLS said.

"Employment growth is still set to lag the recovery in broader economic activity over the coming months given its greater exposure to the services sectors worst affected by the pandemic," Andrew Hunter, senior US economist at Capial Economics, said in a research note.

"Nevertheless, the August data illustrate that, despite the earlier surge in virus cases and more recent fading of fiscal support, the recovery continues to plow on."