- The May jobs report showed a surprise gain in employment and drop in the unemployment rate, defying economists’ predictions for further losses due to the coronavirus pandemic.
- Despite the big gains, there’s a long way to go.
- Job gains were unevenly distributed across industries. The following chart shows the ten biggest winners in Friday’s report.
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Friday’s jobs report surprised economists and policymakers, with the US adding 2.5 million jobs and the unemployment rate declining to 13.3%.
Economists had forecasted a much worse situation in May, with consensus predictions suggesting a loss of 8 million jobs and an increase in unemployment to nearly 20%.
The surprise net gain in employment represents a big turnaround from last month’s report, which showed a loss of over 20 million jobs in April as the economy largely shut down in response to the coronavirus pandemic.
The net job gains largely reflect people returning to work from furloughs and temporary layoffs, rather than new business expansion. The number of unemployed workers who reported that they were on such a temporary work suspension fell by 2.7 million in May, while the number of workers who said they permanently lost a job increased by about 300,000.
Job gains were unevenly scattered across the economy. Restaurants and bars, which had been hit especially hard after the lockdowns largely forced those businesses to stop serving patrons indoors and switch to takeout and delivery-only models, saw an increase of nearly 1.4 million jobs in May. Meanwhile, hotels continued to shed jobs, with the accommodation industry losing 148,200 positions last month.
Although the surprise increase in jobs is good news, the pandemic has caused a lot of damage to the economy, and we are far from a full recovery. The unemployment rate remains higher than the post-Great Recession peak of 10% in October 2009, and the 2.5 million jobs gained in May are a fraction of the more than 20 million lost since the beginning of the pandemic.
Restaurants lost over 6 million jobs between February and April — roughly half the total number of jobs in that industry as of February — and so the big 1.4 million increase in May represents around a quarter of those lost positions coming back.
Here are the ten industries with the biggest total increase in jobs between the April and May reports, according to the Bureau of Labor Statistics’ detailed industry table from Friday’s report:
The 10 industries where people are returning to work the fastest