In August, the U.S. added 1.37 million jobs which were slightly above expectations of 1.32 million. The unemployment rate dropped to 8.4% from 10.2% as the economic recovery continues albeit with slowing momentum. August's gain was less than July's 1.7 million.

There were some small revisions to the June and July report. In sum, the number of jobs added was lowered by 39,000. The jobs market is still riding higher from the "reopening" theme. Only in a few months, will the actual damage from the coronavirus become clear.

Inside the Numbers

Government hiring was especially strong with 344,000 workers added. Although, the Census gave that a big boost. However, despite fears of a revenue crunch for state and local governments, it hasn't shown up yet in employment figures.

The biggest beneficiaries in terms of jobs growth were areas that were most affected by the shutdowns. Retail added 249,000 positions, and leisure and hospitality added 197,000 jobs.

The number of people on furlough also dramatically declined from 31 million in July to 24 million in August. Temporary layoff figures peaked at 18.1 million in April and are now at 6 million.

The reality is that it's difficult to get a reading on the economy with these monthly reports. They, tend to look disastrous on a year over year basis, while they look miraculous on a month to month basis.

There's also a number of competing forces. The primary force is simply that more areas and businesses are reopening. But, another force is the effects of lower economic activity over the past quarter and its impact on businesses and hiring, going forward. The headline figures give a clear indication of the former, but some evidence of the latter can be seen in 534,000 permanent job losses.

What's Ahead?

Due to the pandemic and shutdowns, this has been an unusual recession in which the original playbook doesn't work. Typically, employment is a lagging indicator. For example from 2007 to 2010, the jobs market didn't start rolling over until 2008, while the stock market topped in mid-2007. And, the market bottomed in March 2009, but the unemployment rate kept rising until late-2009. It didn't decisively turn until early-2010.

So much of the job losses weren't real, because it was due to the shutdowns, and the government boosting unemployment insurance, creating a win/win for employers and employees. Thus, much of the increase in jobs that we see now are not real either, but that's also masking the number of jobs lost.