KEY POINTS
- Nonfarm payrolls rose by 2.5 million in May and the unemployment rate fell to 13.3%.
- Wall Street estimates had been for a decline of 8.3 million and a jobless level of 19.5%, which would have been the worst since the Great Depression era.
- Much of the gain came from those classified as temporary layoffs due to the coronavirus-related economic shutdown.
- Leisure and hospitality represented almost half the jobs gained.
U.S. economy added 2.5 million jobs in May—Four experts on what the recovery could look like
Employment stunningly rose by 2.5 million in May and the jobless rate declined to 13.3%, according to data Friday from the Labor Department that was far better than economists had been expecting and indicated that an economic turnaround could be close at hand.
Economists surveyed by Dow Jones had been expecting payrolls to drop by 8.33 million and the unemployment rate to rise to 19.5% from April’s 14.7%. If Wall Street expectations had been accurate, it would have been the worst figure since the Great Depression.
As it turned out, May’s numbers showed the U.S. may well be on the road to recovery after its fastest plunge in history.
“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 stock market roared higher following the report as the Dow Jones Industrial Average gained 800 points as of 11 a.m. ET. Government bond yields raced higher as well, with the benchmark 10-year Treasury most recently at 0.91%.
President Donald Trump expressed pleasure at the report, directing two tweets to CNBC.
It’s a stupendous number. It’s joyous, let’s call it like it is. The Market was right. It’s stunning! @jimcramer @CNBC
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The May gain was by far the biggest one-month jobs surge in U.S. history since at least 1939. The only previous month to register more than a million jobs was September 1983, at 1.1 million.
“Barring a second surge of Covid-19, the overall U.S. economy may have turned a corner, as evidenced by the surprise job gains today, even though it still remains to be seen exactly what the new normal will look like,” said Tony Bedikian, head of global markets at Citizens Bank.
The jump in employment almost perfectly mirrored the 2.7 million decrease in workers who reported being on...
