May sees largest jobs increase ever as recovery from virus begins
Following record job losses, payrolls rose by 2.5 million in May and the unemployment rate fell to 13.3%. Analysts predicted a decline of about 8 million jobs for the month and a jobless rate of nearly 20%, which would have been the worst since the Great Depression.
Instead, leisure and hospitality led all industries, representing almost half the jobs gained over the period, according to data from the Department of Labor. The figures from May could show that the U.S. economy is well on its way to recovery following a severe economic downturn due to shutdowns and the coronavirus.
“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.
Jobs in bars and restaurants increased 1.4 million as municipalities began to relax social distancing measures. The construction industry followed up with a net gain of 464,000 jobs. Education and health gained 424,000, and retail gained 368,000 following a massive plunge of 2.3 million in April.
It is unclear however whether the economy is on the road to a more permanent recovery, or if it simply paused before continuing to decline. A second wave of infections due to the coming of Fall or due to mass gatherings such as the protests over police brutality could lead to a reversal.