JUNE 8, 2020 – JOBS NUMBERS RISE TO THE SURPRISE OF ECONOMISTS
The May payrolls were released Friday, showing an increase of 2.5 million jobs and a drop in the unemployment rate to 13.3 percent from close to 15 percent in April. Economists were expected a further shedding of 8.3 million jobs and a corresponding rise in the unemployment rate to 19.5 percent.
It’s good news in that we seem to have hit rock bottom in April, but the new jobs are, for the most, part furloughed workers returning to work now that the states are allowing businesses to reopen. Jobs in leisure and hospitality accounted for half of the figure.
It seems the damage from the nationwide lockdown was not as severe or as lasting as we feared a month ago,” said Scott Clemons, chief investment strategist at Brown Brothers Harriman.
The May gain was, by far, the biggest one-month jobs surge in US history since at least 1939. The only previous month to register more than a million jobs was September 1983, at 1.1 million. Most of the people who lost their jobs in April were hoping it was temporary, and that seemed to have been true. This quick rebound may hint the US economy is more resilient than originally expected.
Though the situation remains far from normal, US economic performance for the second half of 2020 seems more hopeful.