August jobs up an inline 1.37M; unemployment rate falls all the way to 8.4%

August nonfarm payrolls: +1.371M vs. +1.400M consensus and 1.734M in July (revised from +1.763M).

Total nonfarm payroll is 11.5M below the February level.

Unemployment rate: 8.4% vs. 9.8% consensus, 10.2% prior.

Average hourly earnings rise 0.4% M/M vs. estimate of -0.1%.

Regarding fiscal policy, the better than expected report will mean less pressure to provide another stimulus package, according to economist Christophe Barraud.

And on the monetary policy side, there’s less pressure on the Fed to change its forward guidance soon, he said.

Labor force participation rate increased by 0.3 percentage points to 61.7% in August; that’s still 1.7 pp below its February level.

“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 Bureau of Labor Statistics said.

Increase in government employment reflects temporary hiring for the 2020 Census.

Excluding the hiring of census workers, the pace of hiring slowed to 1.1M from 1.7M in July, writes RSM US Chief Economist Joseph Brusuelas.Notable job gains reported in retail, professional and business services, leisure and hospitality, and education and health services.

The retention in public education employment accounts for the upside surprise in the employment report, according to Barraud.

An interesting note in the BLS report: 24.3% of those employed teleworked because of the pandemic, down from 26.4% in July.

The number of people on temporary layoff decreased by 3.1M in August to 6.2M, down from 18.1M in April; the number of permanent job losers increased by 534K to 3.4M, up by 2.1M since February.

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