The United States Friday reported it had added 2.5 million non-farm jobs to its devastated workforce in May, a number some analysts say is miraculous in light of the consensus opinion of some 8.3 million job losses and a 19.5% unemployment rate for the month.
As a result of the job gains, the national unemployment rate fell to 13.3% from 14.7%. Most of the newly employed were white Americans, however. Unemployment among African-Americans rose to 16.8% while unemployment among whites fell to 12.4%.
The Bureau of Labor Statistics (BLS) said most of the employed in May came from the ranks of employees temporarily laid-off since February due to the COVID-19 pandemic. It said leisure and hospitality accounted for almost half the jobs gained as all the states have reopened their economies starting April.
More than 1.2 million leisure and hospitality workers went back to work in May. Their sector reported 7.5 million jobs lost in April, however. Jobs in bars and restaurants rose by 1.4 million.
The construction sector was the next biggest gainer with 464,000 jobs. The number of people employed in education and health services increased by 424,000 while retail employment jumped by 368,000 after plummeting by 2.3 million in April.
Some analysts believe businesses began rehiring employees earlier and in greater numbers than expected. They said this might be a trend that will likely continue as lockdowns ease. Despite this optimism, economists warn the battered economy is still very far from normal in the labor market. Eric Winograd, senior economist at AllianceBernstein, said the pace of job improvement, if sustained, suggests more reason for hope in the second half of the year.
Manufacturing jobs increased by 225,000 despite the sector still being in contraction. It lost 1.3 million jobs in April. The number of jobs in the other services category rose by 272,000 due largely to a jump of 182,000 for personal and laundry services.
Some economists said the surprising job growth might indicate the long-sought recovery from the severe economic slowdown triggered by the pandemic. Tony Bedikian, Managing Director & Global Markets Head at Citizens Bank Inc, said barring a COVID-19 second wave, the overall U.S. economy could have turned a corner despite no one knowing what the new normal looks like.
Economists say the May employment jump was the biggest one-month job surge since at least 1939. The only other month that saw more than a million jobs was September 1983 with 1.1 million.
"It seems the damage from the nationwide lockdown was not as severe or as lasting as we feared a month ago," noted Scott Clemons, chief investment strategist at Brown Brothers Harriman. He also believes eight in 10 people that were temporarily laid-off are finding their jobs are still there as they return to work.
Other analysts suggest the huge increase in jobs indicates the U.S. economy is more resilient than expected. They also say at least 2.2 million of the returning jobs are full-time. At least 1.6 million of the returning new jobs will be part-time. BLS data also shows a 2.7 million drop in the number of workers that reported being temporarily laid-off.
