• The unemployment had been expected to rise to 20%
  • University of Michigan economist Justin Wolfers noted the current recession is not a typical downturn
  • The biggest gains in jobs was made in the hospitality sector, which added 1.2 million jobs

The May unemployment rate fell to 13.3% from April's 14.7% as the U.S. economy began reopening as states eased coronavirus lockdowns, the Department of Labor reported Friday. Nonfarm payrolls rose by 2.5 million jobs, with the most gains seen in the hospitality sector, surprising economists who had predicted near Great Depression levels.

Economists had been predicting a jobless rate of 20% and more than 8 million more job losses.

Employment is 13% lower than in February when the jobless rate was just 3.5%.

President Trump hailed the report, calling it stunning.


“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 Bureau of Labor statistics reported. “In May, employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade. By contrast, employment in government continued to decline sharply.”

The BLS said the statistics were gleaned from two monthly surveys, with data collected remotely from households and electronically from businesses. BLS said the data collection rate was 69% for businesses, “slightly lower than collection rates prior to the pandemic,” and 67% for households, down 15% from pre-pandemic collection rates.

University of Michigan economics Professor Justin Wolfers said there are two things to keep in mind in trying to understand the statistics: “This isn’t a typical recession,” and the pandemic forced the BLS to change its methodology.

“ The BLS has done an amazing job in keeping the response rate to the payroll survey so high. But the number of firms isn't fixed, and it's hard to make accurate adjustments for firms going bust,” Wolfers said. “The household survey response rate is much lower than normal and may be less reliable .”

Michael D. Farren, an economist at George Mason University's Mercatus Center, said in an email to IBTimes the report may indicate the economy has turned the corner. He noted, however, it doesn't count the 4.1 million workers who were "employed, but absent from work" and the 6.3 million who have left the labor force since February. Adding them in, he said, would push the rate to 19%

BLS said the number of unemployed fell by 2.1 million to 21 million even though an additional 1.9 million Americans filed initial unemployment claims last week. Temporary layoffs fell 2.7 million to 15.3 million compared to April’s increase of 16.2 million. Permanent job losses increased by 295,000 to 2.3 million.

BLS said unemployment declined for adult men to 11.6% and among adult women to 13.9%. Teens had a 29.9% jobless rate.

Among racial groups, unemployment among whites was pegged at 12.4%; Hispanics, 17.6%; blacks, 16.8%, and Asians, 15%.

The labor force participation rate increased by more than a half percentage point to 60.8%, following a 2.5 point drop in April. Total employment rose by 3.8 million to 137.2 million. Full-time employment increased 2.2 million to 116.5 million while part-time employment rose 1.6 million to 20.7 million, accounting for 40% of the month-to-month employment growth.

The number of people not currently in the labor force who want a job fell 954,000 to 9 million. They are not counted as unemployed.

The hospitality sector added 1.2 million jobs, compared to a loss of 7.5 million in April and 743,000 in March. Construction jobs rose by 464,000, nearly halving April’s loss. Education and health services jobs rose 424,000, compared to April’s 2.6 million decline, and retail jobs rose 368,000 following April’s 2.3 million reduction.

The average workweek increased by a half hour to 34.7 hours, with manufacturing seeing an increase of 48 minutes to 38.9 hours. Overtime also was up.