May 2020 jobs report: an unexpected rebound
Surprising many job market predictions (including Wall Street estimates that hovered around 8 million losses), the labor market unexpectedly gained 2.5 million jobs in May, while the unemployment rate decreased to 13.3%. Employers brought some workers back, causing payrolls to rise and unemployment to fall, according to the latest release of the U.S. Bureau of Labor Statistics’ (BLS) monthly jobs report. Here are the headlines from the May jobs report.
Labor market sees unexpected job gains
After a combined drop of 22.1 million jobs (revised) in March and April, companies added 2.5 million jobs in May. These gains offer some hope that the economy is beginning to rebuild and the worst of the coronavirus-related hit to the labor market may be over. According to the report, “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.”
Hiring increased in restaurants and bars
Following losses of 7.4 million in April and 743,000 in March, employment in leisure and hospitality increased by 1.2 million. As many states across the country, including Florida, Georgia, Idaho, and Ohio, began to lift restrictions allowing restaurants and bars to reopen, jobs began to come back, too. With the addition of 1.4 million jobs, bars and restaurants accounted for about half of the total monthly job gains in May. In the travel industry, however, employment continued to decline by 148,000 in hotels and motels.
Many sectors began to regain jobs
In addition to leisure and hospitality, several sectors also saw significant increases in employment last month. Specifically, employment rebounded in:
- Construction: Employment increased by 464,000 in May within the construction industry, gaining back almost half of April’s decline.
- Education and health services: Following a 2.6 million decline in April, 424,000 jobs were brought back in education and health services. These gains were largely seen in offices of dentists (245,000), health practitioners (73,000), and physicians (51,000) as elective and non-emergency healthcare services were. Additionally, social assistance added 78,000 jobs, as child daycare service reopened. Employment in private education institutions rose by 33,000 over the month.
- Retail trade: Retail stores saw gains of 368,000, as clothing stores (95,000), car dealerships (85,000), and general merchandise stores (84,000) reopened.
- Manufacturing: Jobs in manufacturing resurfaced in May, with the addition of 225,000 jobs. According to the BLS report, job gains were about evenly split between the durable and nondurable goods components.
- Professional and business services: There were 127,000 jobs added in May, primarily for workers who service buildings and grounds.
- Financial activities: Within the finance sector, there was an uptick of 33,000 jobs last month. These employment gains were primarily in real estate and rental and leasing companies.
Employment declined in government, tech, and more
While BLS data shows that jobs were gained in leisure and hospitality, construction, education and health services, and retail trade, other sectors that originally may not have been affected by the pandemic, saw job losses in May. “In some ways, those jobs that were working from home were protected from the initial bomb that went off,” Andrew Challenger, senior vice president at Challenger Gray & Christmas, told the New York Times. “We’ve really seen over the last five to six weeks that those jobs are now on the chopping block.” Government jobs took the biggest hit in employment, shedding 585,000 in May. Other notable employment declines were experienced in tech (-38,000), hospitals (-27,000), and transportation and warehousing (-19,000).
Unemployment rate begins to drop
After reaching a record high of 14.7% in April, the unemployment rate decreased in May as workers returned to work. Meanwhile, a broader measure of unemployment—which includes part-time workers and those who gave up looking for jobs—fell to 21.2% from 22.8% a month earlier.
Keeping in mind that the BLS report only shows data leading up to its mid-month reference point, more recent calculations showed that the number of workers applying for and receiving unemployment benefits eased even more at the end of May. The most recent weekly jobless report from the Department of Labor indicated that there were 1.9 million initial unemployment claims filed during the last week of May—the first time initial claims have fallen below 2 million a week since mid-March.
Average hourly earnings fell in May
Following an increase of $1.34 last month, average hourly wages declined in May. In May, average hourly earnings decreased by 29 cents, totaling $29.75. According to the BLS report, “The decreases in average hourly earnings largely reflect job gains among lower-paid workers.”
The next jobs report will be released on Thursday, July 2, 2020, at 8:30 a.m. EST. In the meantime, see how Monster can help you navigate the challenges of the coronavirus pandemic at your organization.