Unemployment Numbers Improve in May: Is the Worst News Behind Us?
What a difference a day makes.
Yesterday, we heard from economists who called the U.S. employment landscape "grim", as 1.9 million Americans applied for unemployment last week.
The Washington Post called that a "painfully high number" and The New York Times cited "further economic strain" across the fruited plains.
New unemployment numbers for May tell a different story, as the U.S. jobless rate fell to 13.3% from 14.7%, according to the U.S. Bureau of Labor Statistics. Economists had pegged the May jobless numbers at over 20% prior to the BLS report - an economic forecast airball for the ages.
To give you a grip on the wide disparity of payroll performance from month to month, the economy added 2.5 million jobs in May after shedding 20.7 million jobs in April.
Now, economists are shifting gears and taking a more upbeat tone on the U.S. economy going forward. This from Mark Hamrick, Bankrate.com's senior economist on today's payroll report:
With a shocker of an upside surprise in the employment report, we may well have seen the worst of the historically horrific COVID-19 related economic downturn. 2020 has been marked by a series of continuing shocks. Finally, we’re seeing a positive shock in the May jobs report pointing 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.
Still, 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.
Of those remaining unemployed, some 15 million believe they are on temporary layoff with the hope of soon joining those back at work.
American consumers, workers and business leaders all share the desire to be in a better place. That journey appears to have begun.
Leading the way, leisure and hospitality, added 1.2 million jobs after losing more than 8 million jobs in the previous two months. Bars and restaurants comprised about half of the total gain in payrolls, according to the Labor Department.
The retail sector also saw a welcomed rebound in job gains, adding 368,000 jobs after losing 2.3 million in April.
Another positive reversal was with labor force participation, those working or looking for work, which increased in May after declines in the previous two months.
We remain mindful of the uneven nature of joblessness and employment. With a jobless rate of 13.9%, more adult women than men (11.6%) are out-of-work. The jobless rate for Blacks at 16.8% remains higher than for whites at 12.4%. Nearly 1 out of 3 teens were jobless last month.
As Hamrick notes, we're nowhere near out of the woods yet. Still, the U.S. economy took a major step toward stability with the May jobs numbers, and that's good news for Main Street Americans anxious about their own job security and financial prospects.
For one night, at least, those people can sleep better. The vaunted U.S. economy seems to be getting back up on its feet and, against great odds, is moving forward.