U.S. Economy Saw Biggest Monthly Jobs Increase in History With 2.5 Million Added in May, Unemployment Rate Unexpectedly Drops Amid Pandemic

What’s the story?

• The Bureau of Labor Statistics (BLS) on Friday released its jobs report for May 2020, which found that the U.S. economy add 2.5 million jobs and the unemployment rate declined to 13.3% as states continue to reopen their economies from the lockdowns imposed to slow the spread of coronavirus (COVID-19) pandemic. 
• The one month job increase is the largest in U.S. history since at least 1939, and the only other month with an increase of more than one million jobs was September 1983, when the U.S. added 1.1 million. Many of the jobs added last month were from workers returning after temporary layoffs induced by the lockdowns, and the gains roughly mirror the decline in continuing unemployment claims.
• Wall Street estimates had expected the economy to lose 8.3 million jobs in May which would’ve increased the unemployment rate to 19.5%, its highest level since the Great Depression. April’s jobs report saw the largest one-month decline in jobs in U.S. history, with 20.7 million jobs lost & a doubling of the unemployment rate in many states before they began easing their COVID-19 lockdowns in earnest.

Jobs Report Breakdown by Sector

• Leisure & hospitality added 1.2 million jobs in May, with food & drinking places gaining 1.4 million jobs & the accommodation industry declining by 148,000 jobs. The net gain of 1.2 million in May follows losses of 7.5 million in April & 743,000 in March. 
• Construction added 464,000 jobs in May after a decline of 995,000 in April. Most of May’s gain occurred among specialty trade contractors (+325,000) about equally split between residential & nonresidential construction, while building construction also added jobs (+105,000).
• Education & healthcare services added 424,000 jobs in May, following a decline of 2.6 million in April. Specifically, healthcare added 312,000 jobs including those at dental offices (+245,000), other healthcare practitioners’ offices (+73,000), and physicians’ offices (+51,000). Healthcare jobs losses continued at nursing & residential care facilities (-37,000) & hospitals (-27,000). Child day care services (+44,000), individual & family services (+29,000), and private education (+33,000) also added jobs in May.
• Retail added 368,000 jobs in May after a loss of 2.3 million in April. May’s gains were focused on clothing & clothing accessories stores (+95,000), auto dealers (+85,000), & general merchandise stores (+84,000); while retail losses continued in electronics & appliance stores (-95,000) & auto parts, accessories, & tire stores (-36,000).
• Manufacturing employment increased by 225,000 with gains split roughly evenly divided between durable & nondurable goods.
• Government employment continued to decline, losing 585,000 jobs in May (of which 487,000 were in local government) after dropping by 963,000 jobs in April.

Demographic Unemployment Information

• Unemployment rates declined in May for adult men (11.6% from 13% in April), adult women (13.9% from 15.5%), Whites (12.4% from 14.2%), and Hispanics (17% from 18.9%).
• Unemployment showed little change in May for teenagers (down to 29.9% from 31.9% in April), Blacks (up to 16.8% from 16.7% in April), and Asians (up to 15% from 14.5% in April).

— Eric Revell

(Photo Credit: iStock.com / andresr)