Labor market powers ahead with strong job gains, lower unemployment rate

NBC BusinessSeptember 16, 2021

U.S. employers hired the most workers in nearly a year in August and continued to raise wages, giving the economy a powerful boost as it moves into the second half of what many economists believe will be the best year for growth in almost four decades.Employment rose by 235,000 in August, and the unemployment rate declined by 0.2 percentage point to 5.1 percent.Hiring is being fueled by an increased need for workers in labor-intensive industries as job gains occurred in professional and business services, transportation and warehousing, education, manufacturing, and other services. Employment in retail trade declined over the month. About 261,000 people entered the labor force in August, lifting the participation rate to 62% from 61% the previous month to a record 160, 818,000 persons. The number of adult persons between the ages of 18 and 65 declined by 835,000 in August to 5.7 million but remains higher than the pre-pandemic level of 5 million in February 2020. The number of discouraged workers, a subset of the marginally attached who believe no jobs were available for them, was 392,000 in August, down by 115,000 from the previous month.

4A. Construct a labor market for the U.S. economy. In constructing your market, ensure there is a title to the market, both axes are labeled, and label curves and initial equilibrium wage and employment with subscript "1'.

4B. Write verbatim a 5-15 phrase from the article that speaks to changes in demand.

4C. Write verbatim a 5-15 phrase from the article that speaks to changes in supply.

4D. Return to your market in 4A (do not construct a new market) and make changes to the market consistent with your answers in 4B and 4C and information in the article. Label new supply and demand curves and new market price and quantity with subscript 2.

4E. From information in the article and showing the formula for the unemployment rate and all calculations, what is the level of employment in August.