The government’s May jobs report stunned Wall Street with the largest number of payrolls gained on record and a drop in the unemployment rate during a month when most expected grim comparisons to the Great Depression.
The U.S. leisure and hospitality industry, which suffered its most-brutal month ever in April, posted an eye-popping rebound in May with a net addition of more than 1.2 million jobs, by far the largest one-month increase in the sector’s history.
In the government’s prior jobs report that detailed the April jobs situation, the leisure and hospitality industry lost 7.7 million jobs, or 47% of total positions.
The vast majority of the industry’s May gains were in food service, which suffered the worst of the nation’s layoffs in prior months. Employers added back some 1.37 million chefs, waiters, cashiers and other restaurant staff in May, a welcome comeback after April’s loss of 5.5 million positions. Casinos and amusement parks, which also fall under the broader leisure and hospitality umbrella, added 26,000 jobs in May.
Construction and manufacturing, two industries that many states allowed to reopen as part of gradual plans to ease Covid-19 restrictions, also saw significant job gains. Construction added 464,000 positions while manufacturing added 225,000.
Retail trade, another area of the economy that stands to benefit from widespread business opening, netted 367,000 jobs as companies across the country hired back a fraction of the workers they laid off.
Even the health-care sector, which lost 2.2 million jobs across March and April as clinics and hospitals pulled back on procedures, added back some 390,700 positions in May.
“These improvements in the labor market reflected 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,” the Labor Department said in a press release.
“In May, employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade,” the government added.
The Department of Labor reported Friday that nonfarm payrolls in the U.S. rocketed by 2.5 million in May and the jobless rate declined to 13.3%, statistics far better than the net negative results economists had been expecting. Consensus estimates had expected the unemployment rate to rise to 19.5% from April’s 14.7% and payrolls to drop by 8.33 million.
Those grim forecasts, had they come true, would have resulted in the highest unemployment rate since the Great Depression era.
“Today was a shocking jobs number – and for the first time this year it was a positive shock – it’s very encouraging to see workers being recalled back by their employers and the unemployment rate dropped back down in May,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, wrote in an email.
“At 13.3%, we are still at a higher rate than any that we hit during the Financial Crisis in 2007-2009, but as long as that continues to move lower, it will show that the re-opening of the economy is proceeding smoothly,” he added.
Not all industries saw a rebound in May, however.
The utilities, transportation and warehousing, and mining industries all posted slight net losses last month. State and local governments also continued to lay off workers in droves, with a net decline of 585,000.
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www.cnbc.com 2020-06-05 14:20:31