Labor Market Improving, BBVA Says

Payrolls grew and unemployment rolls declined during August, signaling a potential for a “normal” labor market sooner rather than later, according to a report from BBVA Research.

The research team for BBVA bank, parent of Alabama-based BBVA USA, noted that nonfarm payroll increased by 1.4 million while unemployment dropped to 8.4%. The month also saw 3 million fewer people on temporary layoffs and labor force participation up to 62 percent.

“The analysis, co-authored by BBVA Chief Economist Nathaniel Karp and Senior Economist Boyd Nash-Stacey, highlights the reverse in weekly hours declines from previous months, with all major industries except education and healthcare reporting a gain,” the bank said when it released the report. “Likewise, weekly earnings posted a solid 0.4 percent monthly gain, implying a 4.7 percent increase in the last 12 months.”

“The report imprints an upside bias to the research team’s short-term forecasts and suggests that labor market conditions could normalize sooner than expected.”

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The research team warns, however, that because of the size of the pandemic’s influence on employment, “a full recovery to ‘maximum employment’ is still likely to take time.”

BBVA, a global bank based in Spain, is the parent of BBVA USA, which is based in Birmingham. BBVA USA is the second largest Alabama-based bank and maintains 89 of its 641 U.S. branches in Alabama.

To see the entire report, click here.

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