The U.S. economy gained 1.371 million jobs in August 2020, according to the U.S. Bureau of Labor Statistics (BLS).﻿﻿ The economy has been adding millions of jobs after losing a record 20.8 million jobs in April. Businesses began reopening after closing in April to slow the spread of the COVID-19 pandemic. Prior to the pandemic shut down in March, the economy was adding around 200,000 jobs a month.

As the chart below shows, job gains have decreased significantly since June 2020.

Where Jobs Were Added

The government contributed the most, adding 344,000 positions in August.

The retail industry added 248,900 jobs after losing 2.3 million jobs in April. Shoppers were told to avoid any stores except essential services, such as groceries and drug stores. Wholesale, which usually trends with retail, added 13,500 jobs.﻿﻿

The pandemic has damaged a weakened retail sector. Store managers have been slashing jobs since March 2017. Online sales have cut into bricks-and-mortar store sales. That's been especially true during shelter-in-place.

Leisure and hospitality added 174,000 jobs. The industry's been adding jobs after losing more than 7 million in April. The sector typically adds between 20,000 and 30,000 positions a month. Bars and restaurants have reopened to limited seating. In April, restaurants were restricted to take-out only.

Health care and social assistance added 90,100 jobs after losing 2.1 million jobs in April. Hospitals began to again offer elective procedures that had been canceled to make way for COVID-19 patients. Normally, this sector adds over 30,000 jobs a month. It remained a strong performer even during the 2008 recession.

Temporary help services added 106,700 jobs. Companies add temporary workers when they aren't sure they will need permanent positions. That's especially true during the early stages of recovery.

Transportation and warehousing added 78,100 jobs.

Financial activities added 36,000 jobs. Banks continued to function during the pandemic but limited the number of people in branch offices. Even before the pandemic, banks had been adding fewer positions as the Fed lowered interest rates. Lower rates reduce profitability to lenders because they must charge less for loans.

Manufacturing added 29,000 jobs after losing 1.3 million jobs in April. Durable goods added 2,000 jobs even though one of its components, auto manufacturing, lost 5,300 jobs.

Construction added 16,000 jobs. The real estate market has continued to boom despite the pandemic. As a result, many wonder whether the real estate market is in a bubble that's leading to a crash.

Information services gained 15,000 jobs. This sector, especially Silicon Valley, is critical to American global competitiveness.

Wholesale trade gained 13,500 jobs.﻿﻿

Where Jobs Were Lost

The mining industry, which also includes the oil industry, lost 2,000 jobs.﻿﻿ That's due to a drop in oil prices. Excess supply from U.S. shale oil producers has lowered prices. Even though OPEC has limited its output, future oil prices are expected to remain subdued due to reduced demand.

The U.S. 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, sex, 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 by the establishment survey.

The household survey is not as accurate as the business establishment report, though. 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 first Wednesday of each month.﻿﻿ 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 the Wednesday before the BLS report.

It 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, whether there are more or less of the unemployed than the week before.

The main value of this report is that it is weekly and so it gives some idea of trends between the monthly jobs reports. It isn’t accurate when predicting the monthly report because it is volatile.