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US unemployment rate rises to 3.7%, economy continues to add jobs

Unemployment Benefits
Posted at 5:40 AM, Sep 02, 2022
and last updated 2022-09-06 12:47:27-04

Despite 315,000 jobs being added in the U.S. in August, the national unemployment rate increased by .2% to 3.7%.

The biggest culprit: The number of Americans in the labor market went up in August. Nearly 600,000 Americans attempted to rejoin the labor market. With more Americans also of working age, the total size of the U.S. workforce grew by 786,000 Americans in August.

The workforce includes people currently employed or looking for jobs.

"There is clear evidence that the employment situation continues to be strong," said Scott Blumsack, chief strategy officer at Monster. "But there's a little bit of evidence that things are starting to moderate a bit."

Blumsack said a large number of available jobs could be nudging people back into the workforce.

But the household budget could be playing a role, as well.

"We saw the personal savings rate increase significantly through the pandemic," Blumsack said. "Now, especially with the impact of inflation, people have less of that financial cushion. With inflation being what it is, that may be an incentive to go back."

In addition to older Americans rejoining the labor market, nearly 300,000 workers aged 16-19 entered the workforce.

The national workforce participation rate increased by .3% to 62.4%. The labor participation rate, however, remains below pre-pandemic levels.

"There are still a lot of factors, driven by the pandemic and the experience we've had over the last few years, that are keeping labor force participation down," said Daniel Zhao, lead economist at Glassdoor.

"The most prominent example is long COVID," Zhao said. "That's still a huge question mark, how many people we can actually get back into the labor force in the long run."

All told, there were nearly 442,000 more employed Americans in August compared to July. There were also 344,000 additional Americans collecting unemployment benefits during the month.

One industry not seeing as much growth is leisure and hospitality. The industry added 31,000 jobs following average monthly gains of 90,000 in the first sevens months of the year, the Bureau of Labor Statistics noted. Employment in leisure and hospitality is below its February 2020 level by 1.2 million, or 7.2 percent, the BLS said.