Employment continued its upward trend in August, but the number of new jobs came in well below expectations as the growing delta COVID variant took its toll. The month saw 235,000 new jobs added to corporate payrolls. Employment gains were seen in professional and business services, transportation and warehousing, private education and manufacturing. Notably, employment in the retail trade industry declined over the month. The overall unemployment rate fell to 5.2% as the number of unemployed Americans fell to 8.4 million. Employment continues to recover, although we remain below pre-pandemic numbers.
The number of long-term unemployed Americans (out of work for 27 weeks or more) fell by 246,000 in August to 3.2 million. The improvement is welcome, but there are still 2.1 million more long-term unemployed people than in February 2020, and their share of total unemployment was 37.4% of the total.
Encouragingly, the number of people returning to the labor market rose by 200,000 in August to 2.5 million. However, even with the returns, the activity rate remained unchanged during the month, at 61.7%, while it remained 1.6% lower than February 2020. The number of people working part-time for economic reasons amounted to 4.5 million in August, unchanged from February 2020. the previous month.
As we head into the fall season, the economy continues to grow, albeit buffeted by headwinds. There is a clear sense that we have come through the worst of the pandemic and are heading towards a brighter horizon. However, today’s figures also show that challenges remain.
For real estate markets, continued employment gains provide a solid foundation for demand. In a promising development, markets are seeing a steady increase in the number of homes for sale, with data from Realtor.com revealing a growing wave of smaller, more affordable homes. The influx of supply is helping to moderate price growth, which is now in single-digit territory after a year of record pace. First-time buyers who found the markets difficult in the first half of 2021 are looking forward to a much friendlier landscape in the latter part of the year, with more options, better prices and favorable financing.