Economy

Surprise: US Jobless Rate Falls To 13.3 Pct

Surprise: Jobless Rate Falls To 13 Pct

In a surprising jobless report, the nation’s unemployment rate fell to 13.3 percent in May as some jobs returned amid a partial reopening of the economy, according to the U.S. Bureau of Labor Statistics (BLS).

Total nonfarm payroll employment rose by 2.5 million last month. The big winners included leisure and hospitality, construction, education and health services, and retail trade. These numbers represent the biggest monthly gains in 81 years.

The leisure and hospitality sector saw a giant leap as jobs swelled by 1.2 million, following losses of 7.5 million in April and 743,000 in March, the BLS reported.

Over the month, employment in food services and bars rose by 1.4 million, accounting for about half of the gains.

But not every sector saw improvements.

Employment in the accommodation industry fell in May, down 148,000 jobs, off by 1.1 million since February.

As governments experienced a dramatic loss of revenue due to COVID-19, employment in that sector declined by 585,000, following a drop of 963,000 in April.

Employment in local government slipped by 487,000 in May and accounted for nearly two-thirds of the decrease, with a loss of 310,000 jobs reflecting school closures. Employment also continued to decline in state government, with a loss of 84,000 jobs.

Department of Labor Secretary Eugene Scalia told Fox News on Thursday (June 4) that he’s confident the unemployment rate will fall below 10 percent by year’s end. Last month, the nation’s unemployment rate was 14.7 percent.

“Many of these jobs will come back quickly because they were still there,” Scalia said. “It was because of public health matters that we were keeping businesses from opening and workers [from] returning. But they are going back now ... we’ve seen some bad numbers, lots of hardship, but we are now reopening and, more importantly, we are reopening safely.”

Analysts had expected about an 8.3 million job loss and about a 19.8 percent jobless rate.

In tweets minutes after the numbers were released, President Donald Trump was elated. “It is a stunner by any stretch of the imagination!" he wrote. "It’s a stupendous number. It’s joyous, let’s call it like it is. The market was right. It’s stunning! Market up big.”

But Kate Moore, managing director at BlackRock, the New York investment management company, said it’s too soon to say whether these positive numbers are a long-term trend.

Mark Hamrick, Bankrate.com’s senior economic analyst, said the positive shock of the May jobless report could point to a quicker-than-expected economic recovery. “We still need to step back and remember that the unemployment rate remains higher than the peak during the financial crisis and great recession,” he said in a statement. "But the solid rebound suggests that investors who bid up stock prices in recent weeks were correct in anticipating solid improvement. Whether those levels will be sustained remains to be seen.”

The new jobless rate comes one day after the U.S. Department of Labor reported that nearly 1.9 million Americans filed for unemployment benefits for the week ending May 30. Since the coronavirus pandemic gripped the nation in mid-March, the number of workers seeking assistance has topped 42 million and has exceeded the job losses of the Great Depression.

“The good news is that we probably have hit the bottom,” Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles, told Reuters just before the new data was released. “But the recovery will be painfully slow. It will take years, probably a decade, to get back to where we were at the end of last year.”

——————————

PYMNTS TV LIVE OCTOBER SERIES: B2B PAYMENTS 2021 – WHAT WILL YOU CHANGE? 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

TRENDING RIGHT NOW