The U.S. economy added a greater number of jobs than expected during August as hiring by the federal government for the 2020 Census and a rebound in retail employment led almost all of the major sectors higher.
The Labor Department reported Friday that payrolls increased by 1.37 million in August, above the 1.32 million estimate that economists polled by Dow Jones had expected. The unemployment rate tumbled to 8.4%, far better than the 9.8% expected.
CNBC studied the net changes by industry for August jobs based on data contained in the employment report.
Government showed the strongest hiring numbers. A torrent of hiring by the federal government for the 2020 Census ballooned net payrolls for the sector by 344,000, about 25% of the over-the-month gain in total nonfarm employment. That eye-popping number was in large part thanks to the federal government's hiring of 238,000 temporary 2020 Census workers.
"After the sell-off yesterday, there will have been a collective sigh of relief to see payrolls rise 1.37 million in August, the fourth consecutive month of gains," Seema Shah, chief strategist at Principal Global Investors, said in an emailed statement.
"One small negative from today's report is the impact it may have on fiscal support discussions," she added. "With growing signs that US activity is improving and jobs are coming back, there is less pressure on Congress to deliver a new fiscal stimulus package. That will be a mistake."
Retail trade took the No. 2 spot in August with a net addition of 249,000 jobs. Almost half of that increase occurred in general merchandise stores, which includes department stores, warehouse clubs and supercenters. Motor vehicle and parts dealers also saw notable gains of 22,000, while electronics and appliance stores netted 21,000.
"These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic," the government said in a release.
"In August, an increase in government employment largely reflected temporary hiring for the 2020 Census," the Labor Department added. "Notable job gains also occurred in retail trade, in professional and business services, in leisure and hospitality, and in education and health services."
Leisure and hospitality continued to post strong numbers after being battered earlier in the year as Covid-19 and efforts to contain its spread froze travel plans and shuttered restaurants around the country. The sector, which added 174,000 last month, saw about 75% of that growth from food services and drinking places.
Despite job gains totaling 3.6 million over the last four months, employment in food services and drinking places is down by 2.5 million since February.
Professional and business services, which encompasses a wide variety of experts from engineers and architects to consultants and lawyers, added 197,000 jobs. More than half of that rebound, or 106,000 jobs, occurred in temporary help services.
— CNBC's Nate Rattner contributed reporting.