Economists expected the jobs report released Friday, June 5, 2020 to show that the economy lost another 7 million jobs in May, or more. Instead, it reported a 2.5-million gain—the largest ever.
Here are 5 big things to know:
1. All employment gains in May were recalls of workers on temporary layoff
The number of unemployed workers on temporary layoffs fell by 2.7 million in May. Meanwhile, the number of unemployed people who have lost their jobs permanently rose by 295,000 to 2.3 million.
2. The largest gains were in industries that suffered the largest losses in April
Employment rebounded in some of the industries hardest hit at the start of the coronavirus crisis, such as food services and drinking places (+1.37 million), construction (+464K), retail (+368K), dentists’ offices (+245K), and manufacturing (+225K). The Paycheck Protection Program (PPP) encouraged rehiring and the relaxation of some COVID-19 restrictions allowed certain businesses to resume operations.
3. Many white-collar industries shed jobs
COVID-19 layoffs hit low-wage service sector workers first. But now, layoffs are increasingly affecting highly educated and highly paid professionals in white-collar industries. In May, job losses hit management of companies and enterprises (-21.8K), computer systems design and related services (-12.7K), motion picture and sound recording industries (-10.7K), telecommunications (-7.8K), and broadcasting (-5.9K), among others.
4. The labor market is not out of the woods yet
There are still almost 20 million fewer employed Americans than there were a year ago, and there were 30 million on unemployment rolls as of May 16 (the reference week in the jobs report). Only about 15% of workers who reported being temporarily laid off in April were recalled in May. So there is still a long way to go before employment recovers fully. And there’s a risk that some recalled workers could be laid off again in the fall when PPP assistance expires.
5. Unemployment for blacks and teenagers remains high
29.9% of teenagers (aged 16 to 19 years) were unemployed in May, up from 11.0% in February. And while unemployment fell significantly for whites and Hispanics in May, it ticked upwards for blacks from 16.7% to 16.8%. The figures suggest that a rising tide may not lift all boats at once.