Unemployment Rate Dips as May Jobs Numbers Rebound
More than two million Americans were hired last month, leading to an unexpected improvement in overall out-of-work data. Though there are some notes of caution.
Today was a good day for those who've been following the rising jobless claims over the past three months. After reaching an alarming pandemic-era peak of 14.7 percent at the end of April, the national unemployment rate dipped to 13.3 percent, according to the latest Bureau of Labor Statistics data. The Bureau announced that 2.5 million nonfarm payroll jobs were added to the U.S. economy throughout May, and the overall number of unemployed Americans fell by 2.1 million from the previous month. The total now stands at 21 million.
It is worth noting that the biggest declines in unemployment rates were among adult men and women, whites and Hispanics, while percentages for teenagers and black and Asian-Americans saw little variance.
Hospitality, construction, education, health services and retail trade accounted for the most new payroll addition, which could be a consequence of early reopening for essential businesses and some consumer-facing enterprises. Food-and-drink service alone accounted for 1.4 million of the 2.5 million.
One big caveat, adds the Bureau in its release, is that, "As was the case in March and April, household survey interviewers were instructed to classify employed persons absent from work due to coronavirus-related business closures as unemployed on temporary layoff. However, it is apparent that not all such workers were so classified."
The statement continues that both BLS and the Census Bureau are "investigating why this misclassification error continues to occur and are taking additional steps to address the issue." The upshot, it clarifies, is that, "If the workers who were recorded as employed but absent from work due to 'other reasons' (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis)."
Bottom lime: As we move further into June, there is reason to maintain optimism, but cautiously so.