Defying all odds and expert predictions, the unemployment rate fell to 13.3% last month, according to the Bureau of Labor Statistics. Nonfarm payrolls also rose by an unprecedented 2.5 million jobs in May. These results shatter economists’ predictions of hitting a record-high unemployment rate of 19.5% and a decline of 8.3 million jobs. If these predictions came to fruition, we would be in the largest state of decline since the Great Depression.
Although not close to its pre-pandemic state, the job market is recovering as people thankfully return to work. Here is a brief breakdown of the May 2020 Jobs Report.
May 2020 Jobs Report Overview
Last month, the unemployment rate was at 14.7% with a massive decline of 20.5 million jobs; numbers we haven’t seen in decades. Fast forward to May, and despite the impact of the Coronavirus, we’ve taken a massive leap in the right direction. The fact that economists predicted a loss of 8.3 million jobs and we gained 2.5 million shows that the U.S. is well on it’s way to recovery.
“It seems the damage from the nationwide lockdown was not as severe or as lasting as we feared a month ago,” said Scott Clemons, chief investment strategist at Brown Brothers Harriman.
This report is shocking to most as another 1.9 million unemployment claims were reported yesterday, totaling nearly 43 million unemployment claims. This drastic increase in jobs despite record-breaking unemployment gains “suggests that the U.S. economy is more resilient than expected,” said Seema Shah, chief strategist at Principal Global Investors.
Where were the job gains?
Significant employment increases occurred in leisure and hospitality (+1.2 million), construction (+464,000), education and health services (+424,000), and retail trade (+368,000). Government employment continued to decline last month (-585,000). Manufacturing also saw a gain of +225,000 jobs, and so did professional & business services with +127,000 jobs.
Revisions from previous months
Total nonfarm employment was revised in both March and April. In March, payrolls were revised down from -881,000 to -1.4 million. And in April, payrolls declined from -20.5 to -20.7 million. With these revisions, combined employment in March and April was 642,000 lower than previously reported. After these revisions, we have averaged a monthly loss of 6.5 million jobs per month over the past three months.
Employers are still hiring
Overall, May’s Jobs Report is truly great news as we continue to recover from this global pandemic. However, we still have a long way to go and must be patient. But employers are beginning to bring workers back and hire new staff members. If you’re currently looking for a new job, Johnson Service Group is here to help. Check out our job board to find your next opportunity!