The U.S. economy gained 235,000 jobs in 2021. The job gains, while significant, reflect the continued impact of the COVID-19 pandemic.
August's gains help make up for the jobs lost since April 2020, when the economy lost a record 20.5 million jobs as businesses shut down to slow the spread of the COVID-19.
As of August 2021, there were 2.7 million more unemployed people than in February 2020, the month before the pandemic. The big swings in job losses and job gains in 2020 and 2021 reveal the tremendous impact of the pandemic on the U.S. economy.
As the chart below shows, job gains skyrocketed in June 2020 as people started working remotely and Paycheck Protection Program funds reached businesses. Gains began to dwindle through the rest of the year, with more people losing jobs in December than gaining.
Gains during the first and second quarters of 2021 have made a dent in total job losses, but the unemployment rate is not back to pre-pandemic levels.
Where Jobs Were Added
Professional and business services gained 74,000 jobs. Engineering and architectural services, and computer systems design and related services were the top job gainers in August, with 19,000 and 10,000 added, respectively.
Transportation and warehousing saw significant increases, adding 53,000 jobs in August after increasing by 49,700 in July.
August is the start of the school year in many states, which paved the way for private education to add 40,000 jobs.
Manufacturing added 37,000 jobs in August. The motor vehicle and parts industry lead the sector gains with 24,000 jobs.
Many industries are seeing gains in employment as more people receive vaccinations and businesses find ways to keep running.
The information sector gained another 17,000 jobs in August after gaining 24,000 jobs in July. This sector, especially Silicon Valley, is critical to American global competitiveness and is still 150,000 short of employment levels in February 2020.
The financial activities sector gained 16,000 jobs, led by real estate's gains of 11,000 jobs. The sector is still down 29,000 jobs overall from February 2020.
Health care, social assistance, construction, government, and wholesale trade flat-lined in August after seeing jobs gains in July.
Where Jobs Were Lost
Three industries lost jobs in August. Retail trade lost 29,000 jobs and state government education declined by 21,000. The leisure and hospitality sector lost 6,000 jobs even after gaining 36,000 arts and entertainment jobs—the gain was offset by a loss of 42,000 jobs in drinking places and food services.
The pandemic continues to damage an already weakened retail sector. Online sales continue to cut into brick-and-mortar store sales.
The US Jobs Report Explained
The monthly jobs report is also called the "Employment Situation Summary" and the "Non-Farm Payroll Report." It's a critical economic indicator because it's the first report of the month. It's also the most comprehensive and credible.
The Bureau of Labor Statistics surveys 160,000 non-farm businesses and agencies on the number of jobs, the wages paid, and the hours worked. The jobs report will tell you which industries are adding jobs, whether American workers are working longer hours, and how fast salaries are increasing.
The jobs report also provides the unemployment rate. To get the number of unemployed individuals, the BLS must undertake a separate survey of households instead of businesses. This household report also includes workers' age, gender, and race/ethnicity. The household survey has a more expansive scope than the establishment survey. It includes the self-employed, unpaid family workers, agricultural workers, and private household workers. They are excluded from the establishment survey.
The household survey is not as accurate as the business establishment report, though. This is because it has a smaller sample size. That's why employment numbers are taken from the establishment survey. So the current unemployment statistics often show a different trend than the jobs report.
Other Jobs Reports
There are two other jobs reports. The monthly ADP National Employment Report is released on the Wednesday before the Employment Situation Report. It's produced by the ADP Research Institute, SM, and Moody’s Analytics. It uses business payroll data to report on the number of jobs added in the private sector. It excludes farming, as does the BLS report. But more importantly, it also excludes government jobs, which are included in the BLS report. For that reason, it's considered incomplete.
The ADP Report is useful because it's released just before the BLS report, giving you an idea of what to expect from the BLS.
The ADP report gives some analysts an earlier view of what might happen in the Friday report. ADP is quick to say it's not intended to be predictive. Like the BLS report, it's revised as more data comes in later in the month. These revised numbers are 96% correlated with the revised BLS jobs report.
The Department of Labor also releases a weekly jobless claims report. This measures the claims for initial unemployment benefits reported by each state every week. It also says how many of the unemployed are still receiving benefits. This report gives an indication of trends and indicates whether there are more or less unemployed than the week before.
The main value of this report is that it is weekly, which gives some idea of trends between the monthly jobs reports. However, the weekly report is too volatile to be a reliable method of predicting monthly job gains and losses.