The American economy had never seen a one-month drop as steep as April’s loss of 20.5 million jobs. Nor had it ever seen a one-month rebound as sharp as May’s, when 2.5 million people returned to work, lowering the unemployment rate to 13.3 percent, from 14.7 percent, and allaying fears of a depression-like contraction ahead.
A survey of economists by FactSet just before the Labor Department released its May report indicated expectations that the unemployment rate would hit 19.8 percent with an additional loss of 8.5 million jobs, with a sharp reversal in subsequent months, reflecting the reopening of the economy. Today’s report is taking those economists by surprise, pointing both to less severe immediate consequences on the economy from the coronavirus and quicker returns from the reopening of society, which began in April in several parts of the country.
The number of unemployed on temporary layoff decreased by 2.7 million in May to 15.3 million, following a sharp increase of 16.2 million in April, though the number of permanent job losers continued to rise, increasing by 295,000 in May to 2.3 million. The number of unemployed who were jobless less than five weeks decreased by 10.4 million to 3.9 million. They made up 18.5 percent of the unemployed. The number of unemployed who were jobless five to 14 weeks rose by 7.8 million, to 14.8 million, accounting for about 70.8 percent of the unemployed. The long-term unemployed, jobless for 27 weeks or more, numbered 1.2 million, an increase of 225,000 over the month. They represent 5.6 percent of the unemployed.
The number of people employed part time for economic or involuntary reasons–because their hours have been cut back or they could not find full-time work–was at 10.6 million, up by 6.3 million since February but not much changed since April.
The biggest gainer in jobs in May had been the biggest loser in April: leisure and hospitality, including bars and restaurants. The sector added 1.2 million jobs, a vast improvement but still far from recovering the 7.5 million jobs lost in April and an additional 743,000 loss in March. Hotels and motels still lost more jobs in May (148,000).
Construction was another sector that saw big improvements, increasing employment by 464,000 in May and gaining back almost half of April’s decline of 1 million. Much of the gain occurred in specialty trade contractors (325,000 jobs), with growth about equally split between the residential and nonresidential components. Job gains also occurred in construction of buildings (105,000), largely in residential building.
Education and health services added 424,000 jobs after a decrease of 2.6 million in April, with gains in dentists’ offices (245,000) and other medical practitioners (73,000) and physicians (51,000). Child care services also added 44,000 jobs. But losses continued in nursing homes and assisted living facilities (-37,000) and hospitals (-27,000).
In retail, the sector added 368,000 jobs, after a loss of 2.3 million in April. Others service industries saw an increase of 272,000 jobs after a decline of 1.3 million in April. Manufacturing employment rose by 225,000, after an April decline of 1.3 million.
Losses were steepest in government, with a decline of 585,000 jobs, adding to a decline of nearly 1 million jobs in April. Most of May’s decline was in local government (487,000 jobs), and most of that was the result of education job losses.
But job losses in March and April were steeper than the Labor Department had initially reported, with 642,000 more jobs lost than the 21.4 million first reported, bringing the two months’ job losses to 22 million. That number matters in terms of the steepness of the recovery ahead. While payrolls are picking up again, the recovery may be a slog until jobs lost are restored, and many economists believe that millions of jobs may not return at all. But many economists had also predicted a 20 percent unemployment rate for May.
A month-over-month downside: while average hourly earnings for all employees on private payrolls had zoomed up $1.35 in April, the rate fell 29 cents to $29.75, in May. The decreases reflect job gains among lower-paid workers.
All sounds good but for some reason I am not believing it.
William Moya says
You were (are) right.
Dennis C Rathsam says
Thank you president Donald J Trump!
@Don’t worry – die happy
So millions of people RETURNED to jobs they already had. Good. Good IS good – not something else.
Now all the starving cats, i.e., the 40% of Americans with no savings before the pandemic, will stuff cash registers with what? Oh right – they can catch up on rent, mortgages, auto loans, medical bills, etc., etc. with one hand, and make business great again with the rest of the money they don’t – and never did – have. The bad debts from all sources will go away, “…like magic…” The tombs of bankrupt and liquidated businesses will open and the dead shall rise. Hallelujah.
No doubt, the public employees (many of them first responders) who will be free to savor “new challenges and opportunities” (only losers who make poor choices and shirk personal responsibilities get “laid off” – right?) will fill the air with song as governments’ budget constraints launch a titanic reduction of their payrolls. Retirees, of course, will be immune. Maybe not? Oh my.
The tourists that died, went broke, etc. are on their way back?
And best of all the current national come back of COVID-19 will burn a whole load of dead wood it didn’t get in the first wave.
Those same people who have no savings, many of them have the very latest iPhone, designer clothes, new cars, and drink Starbucks several times a week. Maybe That is what many have no savings. Don’t try to be a Kardashian when you have the income of a “Connor”.
Mary Fusco says
Retirees learned many years ago to save their money and not spend every dollar that came in as if it was their last day on earth. Sad how people are so bitter towards people that knew how to manager their money.
The economy is bouncing back fast, due in large part to the steadfast economic foundation that President Trump has solidified over the last three and a half years.
The Truth says
Are you serious? One month of 2.5 m job growth after the previous month where we lost 20+ m and you’re going to say we are rebounding due to Pres. Trump? We had a record job loss last month so any rebound is good, but let’s not get ahead of our selves and let’s not congratulate Trump either. He wasn’t at fault for the amount of losses and isn’t to thank for the gains. People are simply getting back the jobs they lost.
Thx Ben Bernanke and Hank Paulsen
Well when you force businesses back open, people go back to work, and unemployment goes down. Also, some people just gave up trying to claim unemployment since many states are dragging their feet blaming “garbage systems” when the truth is, states don’t want to pay claims and want people back to work. Why do you think there was such a rush to get the economy open? States will bankrupt themselves and you can’t print enough money to get yourself out of this situation, so you make a choice–live with the pandemic and realize people will die until there is a vaccine for those that want it and try mitigating the crisis when hot zones explode. I know reports out today say this is weakening. People have to remember, there are at least 4 strains and the one the US and Italy are seeing as weakening is the same strain, the “C” strain. There is still the “A,” “B,” and “D,” strains out there and whatever one is hitting Russia, Brazil/Central/South America shows no signs of weakening and is still very deadly. People are bought and paid for everywhere, from scientists, to modelers, to politicians, to doctors, and on and on and on. Not everyone has a conscious, some people will sell their souls, and risk the lives of millions/billions for a little bit (or a lot of) money.
They’re discovering the 4 strains, Coronavirus is still a gold mine for healthcare when it pays out like it does, $ 13-39K per patient, the flu never paid this well, so any & everything flu-like including the flu is Coronavirus. Spot on with the State Unemployment System collapse and non-pay out. Why would the Federal Govt. supplement go thru a state system that can’t even process unemployment claims ? A State system earning interest on Federal money it never will pay out. The IRS got it done, they were set up to process $ 1,200 one time payouts without collapsing. I disagree with the printing of money thing, especially if it’s a digital/virtual deposit. Every recession they print out whatever money they need, this is no different. We saw a Wall Street DOW that dropped 10K points, rebounded 7 of that amidst the Coronavirus pandemic and revival of BLM. The economy is healthy as a whole, it’s the 40 million individuals that are economically financially unhealthy (they were dubbed the non-essentials in a nation of essentials) that are struggling as a rebooted labor pool of desperation. They’re saving a lot of money by not paying people much of anything and using those resources to pay for as much of the recovery as possible. Bleeding out individual savings for retirements. Too many were reset/rebooted.
Its NOT that businesses are being FORCED back open they have a choice to open or go under. Unlike when government FORCED them to close.
Taking the high road and it all sounds good but after todays rally definitely selling into strength because Markets have gone way too far too fast IMO. Cant fight the Fed. though so..,..,..Rally on without me.
If you have been watching whats happening with Corona Virus latley, the Country will be shutting again soon so make that money while you can
Land of no turn signals says says
The economy is not going to rebound if people keep burning it down and looting.
NOTHING TO CELEBRATE HERE! This morning’s news says those employment figures are NOT accurate and that the true unemployment rate is actually higher. Just wait until the $$$$ runs out for keeping thousands of “high paying jobs” for airline employees paid. The unemployment rate hasn’t completely shaken out yet.
Plus we are now seeing spikes of positive tests/death rates from Covid all over the country. . . due to “Impeached” trump’s pressure to reopen. It’s likely that crowds (not wearing masks/social distancing) protesting against systemic racism will raise the illness/death rate even higher.
It would be complete lunacy to pretend that it’s all over and we can all just resume our normal lives. But then again, what else is new with trump and his “CULT”?
To those who live using “factual” information for decision making, and strive to be caring, civilized, evolving human beings. . . .
Thank you for wearing your mask to protect others
Thank you for actively supporting EQUALITY for ALL
Thank you for VOTING
Thank you for speaking out about injustice
Thank you for your compassion and caring
Stay “Safe” and “Healthy”. . . unfortunately, there are more challenges to come. . . stay strong, courageous and wise!
LetThemEatCake. . . Very Well Said! Love your handle. . .although many don’t “get it” about themselves, unfortunately.
All of the deaths and turmoil because of an incompetent dugout donnie !!!!