Economy in Surprise Rebound, Adding 2.5 Million Jobs

Economy in Surprise Rebound, Adding 2.5 Million Jobs

Economy in Surprise Rebound, Adding 2.5 Million Jobs

During an appearance on Fox News Channel on Friday after the announcement the economy added 2.5 million jobs, Labor Secretary Eugene Scalia said to expect an even better number in July for the month of June.

The American economy had never seen a one-month drop as steep as April's loss of 20.5 million jobs.

The government said Friday that the economy added 2.5 million jobs last month, driving unemployment down from 14.7% in April.

There were 15.3 million people on temporary layoff in May, in addition to an estimated 4.9 million people who had temporarily lost their jobs but were counted as employed but "not at work for other reasons".

The Labor Department attributed the job improvements to "a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it".

But the numbers may be understating the problem: There are still almost 20 million people who are jobless, and employment is roughly 13% below its level in February, before the pandemic struck.

Economists were shocked on Friday as United States employers added 2.5 million payrolls in May, defying expectations for 7.5 million jobs lost. "Great going President Trump (kidding but true)!" he wrote on Twitter.

The increase in the number of jobs - which mirrored a similar bump in the US - came after three million jobs were lost over March and April and about 2.5 million more had their hours slashed.

Construction was another sector that saw big improvements, increasing employment by 464,000 in May and gaining back nearly half of April's decline of 1 million. In that case, the unemployment rate would have been roughly 5 points higher than the 14.7% reported.

Government saw the biggest shedding of jobs (585,000).

The FBI in March forecasted a rise in hate crimes against Asian Americans, noting in a report that the warning was made "based on the assumption that a portion of the US public will associate COVID-19 with China and Asian American populations". Even if May's pace of job growth could be sustained - something most economists doubt - it would take at least six months to bring them all back to work.

The Bureau of Labor Statistics said that the unemployment rate fell partly because states have begun to reopen businesses that were shuttered to enforce social distancing measures. The unexpected job gains included 13,200 in accounting and bookkeeping.

Ian Shepherdson of Pantheon Macroeconomics, one of few who anticipated positive news in the jobs data, called the report, "The biggest payroll surprise in history, by a enormous margin", which he said "likely is due to a wave of hidden rehiring".

Walmart CEO Doug McMillon said this week that the company hired more than 300,000 associates in the US. Instead, these workers are working fewer hours because of issues involving child care, school and other family obligations.

Other hard-hit industries saw increases in employment: construction added 464,000 jobs, education and health services 424,000 and retail recorded an increase of 368,000. "Really Big Jobs Report". And job losses continued in the air transport, transportation and warehousing, mining and logging, and information sectors. 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.

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