(CN) — Continuing on a downward trend, the American economy recovered just 1.4 million jobs in August while the unemployment rate dropped to 8.4%.
The labor market is still 11.5 million jobs short of where it was before the Covid-19 pandemic delivered a crushing blow to the economy in the spring.
The modest gain reported Friday by the Labor Department lags behind the revised 1.7 million jobs recovered in July and falls well short of the 4.8 million positions added back in June.
Nick Bunker, economic research director at Indeed Hiring Lab, said there is still a lot of economic damage and “the speed of repair is slowing down.”
“Notably, improvement seems to be slowing down the most in industries that are the most hard-hit, which suggests that the easy wins are going away,” he wrote.
Government jobs grew by 344,000 last month, but a large chunk of that gain – 238,000 jobs – came from the temporary hiring of census workers. The public sector is still 831,000 jobs below its February level.
In the private sector, retail trade led the way with 249,000 more jobs in August. Professional and business services added back 197,000 positions. The leisure and hospitality industry, which includes restaurants and bars, recovered 174,000 jobs last month.
“The source of the payroll slowdown is concerning,” Bunker said. “After being the major source of bounceback in job gains, leisure and hospitality employment has slowed considerably after being devastated early in the crisis. If this sector has run out of steam, high levels of joblessness will last longer than initially thought.”