U.S. labour market unexpectedly improves in May

Share

Instead, the economy added 2.5 million jobs in May, which drove unemployment down from 14.7% in April, according to the U.S. Department of Labor.

Meanwhile white Americans saw the largest decrease in unemployment of any racial group, going from 14.2% in April to 12.4% in May. While much of this increase was because of states being late in getting new applicants processed for unemployment insurance benefits, it is hard to see how 17.4 million more people getting benefits can fit with two million more people getting jobs. The numbers will be a relief to policy makers after the unprecedented loss of about 3 million jobs in March and April. But the improvement was unequal, with the unemployment rate for whites posting a record decline, but rising for blacks and Asians.

But even with the solid hiring in May, the current jobs picture is still worse than in the Great Recession. Economists believe the unemployment rate peaked in May, but see it remaining above 10 per cent when Americans head to the polls on November 3.

The figures reflect a steep rise in leisure and hospitality jobs (1.2 million), construction (464,000), education and health (424,000), retail (368,000), manufacturing (225,000), professional and business services (127,000), financial activities (33,000) and wholesale trade (21,000). That means the number of Canadians who have either lost their job or worked substantially fewer hours has fallen to just under 5 million, from about 5.5 million in April. Extremely welcome reversal, of course, if it sticks, but the magnitude of the losses means that even if this uptick pace continues, it would take nearly a year just to make up lost ground.

Noting that the new job data showed "surprising strength in nonfarm employment", Vitner said "while the economy is now on the road to recovery, that road is likely to have many twists and turns along the way".

The official unemployment rate only counts people who indicated they are willing and able to work and are now not working in any capacity.

George Floyd Had Tested Positive For Covid-19
Prosecutors last week accused Chauvin of third-degree murder and second-degree manslaughter. The new charges were to be filed by Minnesota Attorney General Keith Ellison .


But with a massive $3 trillion infusion of government aid, and trillions more in lending to businesses, economists say it is likely firms were able to bring workers back.

Combined with people working more hours, the province recovered almost 30 per cent of what it lost in March and April. These people want to be working a full, 40-hour work week, but can not.

"Undergraduates who both work during college and complete a degree gain the most in terms of a post-college earnings advantage", write Rutgers researchers Daniel Douglas and Paul Attewell.

For weeks, economists had been warning that unemployment in May could hit 20% or more, rivaling what was seen during the depths of the Depression in the 1930s.

Some economists had predicted government loans to businesses to rehire workers would offer a temporary improvement in the data, and warn it may be too soon to get confident about the recovery since they may not be able to keep those employees.

"As was the case in March and April, household survey interviewers were instructed to classify employed persons absent from work due to coronavirus-related business closures as unemployed on temporary layoff", the Labor Department said in the report. The department said it was investigating how it could mitigate the misclassification in the future.

Share