Unemployment Rate Falls in May with an Increase of 2.5M Jobs
By Nicholas Rizzi June 5, 2020 11:30 am
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The unemployment rate for the United States unexpectedly fell in May as the country began to reopen after the coronavirus pandemic and people slowly returned to work, according to the United States Department of Labor.
The country added 2.5 million jobs in May which drove down the unemployment rate from 14.7 percent in April to 13.3 percent, according to the Department of Labor’s report released this morning. However, the unemployment rate is still close to numbers last seen during the Great Depression.
“Today’s report shows much higher job creation and lower unemployment than expected, reflecting that the re-opening of the economy in May was earlier, and more robust, than projected,” U.S. Secretary of Labor Eugene Scalia said in a statement. “Millions of Americans are still out of work, and the Department remains focused on bringing Americans safely back to work and helping states deliver unemployment benefits to those who need them. However, it appears the worst of the coronavirus’s impact on the nation’s job markets is behind us.”
Restaurants and hospitality — which have been hit hard during the pandemic — posted an increase of 1.2 million jobs in May reversing months of job losses as some states around the country ease the strict stay-at-home orders, the Department of Labor said. Employment in construction, education and manufacturing also increased last month.
In May, the jobless rates for adult men, women, white and Hispanic Americans increased while unemployment for teenagers, Asian Americans and black Americans remained relatively unchanged.
Since the coronavirus pandemic spread across the country, local governments implemented strict measures to curb the spread of the virus which forced businesses deemed non-essential to temporarily shutter. Millions of Americans lost their jobs and a record 6.9 million workers applied for unemployment benefits in just one week in April.
While the May numbers were a rare sign and a sign the economy will bounce back quicker than expected, economists warned that it will take a long-time to fully recover.
“The idea you would see job gains and the unemployment rate falling was not something really that people were expecting,” economist Jay Shambaugh, of the Brookings Institution, told The Washington Post. “But a 13.3 percent unemployment rate is higher than any point in the Great Recession. It represents massive joblessness and economic pain. You need a lot of months of gains around this level to get back to the kind of jobs totals we used to have.”
Ernie Tedeschi, an economist at Evercore ISI, told the New York Times that the May increases were likely caused by laid off or furloughed workers returning and were “low-hanging fruit.”
“These may have been the easiest workers to bring back,” Tedeschi told the Times.
