Economy bounces back during reopening in May as U.S. adds 2.5 Million Jobs

WHAT YOU NEED TO KNOW:

• The US economy rebounded as the country started to reopen in May from months of shutdown due to the coronavirus — from almost 14.7% unemployment rate in April to 13.3% last month.
• May’s unemployment rate is still remarkably high throughout history but is far better than what forecasters have predicted.
• According to Glassdoor Senior Economist Daniel Zhao, the labor market “still faces an unemployment rate at the highest level since the Great Depression with tens of millions of Americans still out of work.”

Unemployment rate in the United States fell to 13.3% as American employers have added 2.5 million jobs and businesses have started to reopen —resulting in a positive turnaround for the country’s economy in May.

Stocks went high shortly after Friday’s job report was released. The Dow Jones Industrial Average registered 829 points, more than 3%, and the S&P 500 increased at 2.6% by end of day.

During a speech at the White House Garden, President Donald Trump said: “Now we’re opening and we’re opening with a bang… This is a rocket ship.”

The news was a remarkable reversal as US lost almost 20.7 million jobs from the shutdowns made to mitigate the virus outbreak.

The unemployment rate in May is still significantly high in history, but far better than forecasters have anticipated. The economic rebound exhibits an improvement over April’s unemployment rate of 14.7%.

The pandemic layoffs have slowed down in recent weeks. Some workers who were idle in April were requested to report back for duty in May, marking the start of reopening.

Meanwhile, unemployment rates for black and brown workers continue to increase, further amplifying the ongoing protests of social justice and racial inequalities across the country. The unemployment rate for African Americans in May was 16.8%, a little above April’s figure. The jobless rate for Latinos declined to 17.6% last month from 18.9% in April.

The Labor Department presented updated figures showing that job losses in March and April were higher than the initial report. Weekly jobless claims reveal more than 37 million Americans are either receiving unemployment benefits or waiting for employment applications.

Job gains in May exhibited a turnaround for some establishments which took a huge blow from the shutdown. After losing 6.1 million jobs in March and April, bars and restaurants recovered 1.4 million jobs. Retail, construction, and manufacturing also recovered last month while health care added 312,000 jobs last month, after cutting 1.5 million jobs in April.

Daniel Zhao, senior economist with the job-search website Glassdoor, said, “Although today’s report feels like a relief for many, it’s important to remember the labor market still faces an unemployment rate at the highest level since the Great Depression with tens of millions of Americans still out of work.” 

State and local governments have reduced a total of 575,000 jobs in May, less than the 900,000 jobs cut versus April.

Source: NPR.org