- May unemployment report shows surprising addition of 2.5 million jobs.
- Unemployment rate ticks down to 13.3% from 14.1%.
- Job gains seen in Leisure/Hospitality, Construction and Healthcare.
In a historic and surprising surge in hiring, U.S. employers added 2.5 million jobs in May, shocking economist and investors who were expecting millions of more job losses amid the economic recession brought on by the pandemic. The unemployment rate, at 13.3%, fell from 14.1% in May, and was sharply lower than forecasts of up to 20%.
The reversal comes in the face of mounting weekly jobless claims over the past ten weeks that total more than 40 million American workers. The May unemployment report showed that workers who were temporarily laid off at the start of the crisis were rehired, as that number decreased by 2.7 million. It was 15.3 million in April, and 16.2 million in March, according to the Labor Dept.
Among the major worker groups, the unemployment rate declined for adult men and women, overall, and for white and Latino workers. The rate barely budged for black and Asian American workers, and workers under 20 years old, according to the Bureau of Labor Statistics .
Here's where the job gains were in May:
U.S. stock markets—which have been on a steady rally upwards for the past six weeks—sprinted higher on the news, with the DJIA, S&P 500 and Nasdaq all surging 2% to 3%. Technology stocks have been the leaders of the rally and the best performers in the market, with the Nasdaq 100 hitting all-time highs of late. But, in the past several weeks, industrial stocks, financials, and airlines have all rallied on hopes that the worst of the economic news is behind us.
Today's report may be the sign they were looking for, although the realities of a nation with 13.3% unemployment may have yet to set in. In February, just three months ago, the unemployment rate was 3.5% and last month's 14.7% was the worst since the Great Depression. The disconnect between the economy and the capital markets has never been more extreme.