August 2020 Employment Report by Bruce Steinberg


Are jobs and employment going sideways?

Two days ago the Federal Reserve Board published its September 2020 edition of the Beige Book, their regional and sector anecdotal observations of the economy. Several common themes cropped up throughout the country and we’ll examine this excerpt from the Beige Book more closely: “… slowing job growth and increased hiring volatility, particularly in service industries, with rising instances of furloughed workers being laid off permanently as demand remained soft.”

Back in April 2020 and May 2020, we mentioned that a lot of workers who self-reported that they were furloughed — and characterized  by the Bureau of Labor Statistics as “on temporary layoff” by not really on temporary layoff by positing if it was “wishful thinking that they will be recalled from layoffs? Also, are employers are not being frank by dangling the prospect that furloughed workers will be the first to be rehired when, in fact, employers will use this as a way to eliminate workers whose productivity does not meet the possibly new and reduced level of activity?”


The latest data this month’s BLS month’s employment situation seems to indicate that workers’ expectations of returning to their jobs may indeed had been overly optimistic. As the chart shows, the number of permanent jobs losers has been steadily increasing, albeit at a slower rate of increase than those on temporary layoffs have been decreasing. In August, there were 3,411,000 permanent job losers while there were 6,160,000 on temporary layoffs, or on furlough.


Pivoting back to the Fed’s recent Beige Book, it seems that some employers / businesses are deciding that there are no longer jobs for laid-off workers, ” … Some larger firms also reported laying off furloughed workers in the face of slower recovery.” In another part of the country, “… a few firms reported that previously furloughed workers have recently been laid off permanently — a sign that the labor market’s recovery may not be smooth.”  And similar comments from other parts of the country include: “… many contacts noted that some prior staff cutbacks were permanent, and others had used attrition to reduce headcount.” and another employer told the Fed, “I anticipate furloughs becoming layoffs if some of our shelved work doesn’t start up.”

Our summation of the Federal Reserve Board’s latest Beige Book highlighting developments and reports about trends in regional employment and wages, staffing services, information technology, engineering, manufacturing and other industries that drive the staffing and IT sectors is here and our webpage includes the link to the full Beige Book..

Initial unemployment claims still very high ...  Steinberg_Initial_UI_Claims_to_August_29_2020.jpg

The latest Beige Book also discussed that the rich unemployment benefits appear to be keeping workers from going back to work. A typical comment: “… generous unemployment benefits had made it difficult to bring payrolls back to desired levels, especially at the entry level.”

The number of initial unemployment claims rose last week, but by a relatively small amount.

BTW, the Labor Deportment changed the seasonally adjustment methodology because of the pandemic, which is why we have always reported the not seasonally adjusted data for this series.


August 2020 Employment Report

Quick Recap

As we mentioned last month many states either halted or walked back their reopening plans due to the resurgence of COVID-19 in June and the July employment situation certainly reflects this slowdown.

 Regardless, the unemployment rate continue to decrease as the number of unemployed persons decreased as other measurements of employment improved in July but at a slower pace than in June as discussed in the Household Survey section below. However, the number of people filing for unemployment benefits last week continued at a high level — for a chart see our Twitter feed.

The economy added a total of 1,763,000 nonfarm jobs in July, which in of itself is a very good number, but pales to the 4,791,000 it added in June and increased by 2,725,000 in May. Not to lose perspective, in April, the economy lost 20,787,000 jobs 

After average hourly wages were down by 38 cents an hour in June, likely due to large uptick for lower-paying service jobs coming back that month, hours pay rose 7 cents in July, which is somewhat consistent with the normal trend.

And Temporary help services two-peats with a healthy gain in July that was essentially identical to the June increase.


Job Report

The Bureau of Labor Statistics reports that the economy added 1,027,000 private-sector jobs in August after increasing by 1,481,000 in July and growing by 4,729,000 in June.

The private Goods-producing sector was up only 43,000 in August after adding 61,000 in July and increasing by 485,000 in June.


  • Manufacturing was up 29,000 in August after adding 41,000 in July and increasing 333,000 in June.

  • The Construction sector performed similarly with a gain of only 16,000 in August after growing by 27,000 in July and increasing 159,000 in June.

  • And Mining and logging continued to dig itself a bit farther into a hole with a loss of 2,000 in August after extracting, 7,000 jobs from its payrolls in July and the same amount in June.


The private Service-providing sector added only only 984,000 jobs in August which would be a very good number if not compared to the 1,420,000 it added in July or the 4,244,000 it increased by in June.

  • The Retail trade sector bucked the trend of slowing growth with the addition of 248,900 jobs in August that was more than the 236,200 more jobs it rang up in July, but still a discount to the 858,000 it added in June.

  • And the Wholesale trade sector started to move forward again with an increase of 13,500 jobs in August after shipping out 19,600 jobs in July that had followed a large increase of 51,900 in June.

  • Things were picking up in Transportation and warehousing that added 78,100 jobs in August after increasing by 48,800 in July.

  • Financial activities posted a nice job gain multiple with an increase of 36,000 in August after adding 13,000 in July.

  • The Professional and business services sector increased its increase with a gain 197,000 jobs in August after adding 153,000 in July. Computer systems design and related services was able to computed an increase of 12,800 jobs in August after declining by 5,100 in July. Management and technical consulting services added 5,300 in August after adding 2,400 in July. Architectural and engineering services was able to draw plans for 14,400 more jobs in August after erasing 1,300 jobs in July

  • The private Education and health services sector was up 147,000 in August after adding 222,000 in July. Home health care services continued to recover with an historically large increase 11,600 in August after adding 11,200 in July.

  • Although the Leisure and hospitality sector grew by 174,000 in August, this pales in comparison to the 621,000 it added in July or the 1,979,000 it gained in June.

The total number of Government jobs was up a total of 344,000 in August. The federal government was up 251,000, state government was down 2,000, and local government was up 95,000. Incidentally, the USPS added 4,200 in August after canceling 5,400 jobs in July.

Temporary Help Services Roundup

As mentioned earlier, Temporary Help Services has experienced somewhat steady growth with a gain of 106,700 jobs in August, but that was slower than the 121,800 it increased in July or the 144,600 increase observed in June. This brings the total number of THS jobs to 2,467,900, which works out to a 4.5 percent sequential increase, but is still down 16.1 percent from August 2019.

The recent growth in THS can at least be partially attributed to employer shy about adding workers with so much uncertainty ahead. And staffing services — as most employers — continue to face challenges in securing workers partially attributed to generous unemployment benefits that was reported in the Fed’s September Beige Book released just two days ago.

For a chart of temporary help’s growth from January 1991 to August 2020 and comparing its trend to total employment, click here. 



In August 2020, temporary help services market share, which is its portion of all jobs, continued to recover and was 1.7514 percent. A year ago in August 2019 it was 1.9461 percent and two years ago in August 2018 it was 2.0008 percent.



Household Survey

We’ll let a special note from BLS speak for itself regarding the impact of COVID-19 on the Household Survey data: “For March through July, BLS published an estimate of what the unemployment rate would have been had misclassified workers been included. Repeating this same approach, the overall August unemployment rate would have been 0.7 percentage point higher than reported. According to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.”

Officially, the unemployment rate in August was 8.4 percent and that is lower than the published July rate of 10.2 percent.

The number of employed persons increased 3,756,000 in August as the number of unemployed persons declined 2,788,000. The size of the entire labor force expanded by 968,000 and there were 783,000 fewer people considered as not in the labor force in August.

The labor force participation rate increased 0.3 percentage points to 61.7 percent in August from July and the employment-to-population ratio was up 1.4 to 56.5 percent; in “normal” times these data rarely vary more than 0.1 on the month-over-month basis.

The number of discouraged workers is still up from a year ago to 551,000 in August 2020 from 467,000 in August 2019.

BTW, we maintain an updated table of many major employment as well as other general economic indicators here or here for the mobile version.