MNI DATA REACT: US Surprises With 2.5M Jobs Added in May

By Brooke Migdon

     WASHINGTON (MNI) - The U.S. economy added 2.5 million jobs in May, bouncing

back quickly from April's record-shattering job loss and signaling an

earlier-than-expected recovery for the labor market as health-related lockdowns

eased, the Bureau of Labor Statistics said Friday.

     The data beat even the most optimistic analyst estimate at 800,000 jobs

lost. The median expectation by analysts surveyed by Bloomberg was 7.5 million

jobs lost in the month. 

     The unemployment rate retreated slightly to 13.3% from 14.7% in April, when

markets had expected unemployment to rise to Great-Depression-era joblessness. 

     The BLS commissioner again acknowledged potential misclassification issues

in underestimating the true rate of unemployment. As in April, a large number of

workers who were recorded as employed but absent from work due to "other

reasons" should have been classified as "unemployed on temporary layoff," the

BLS said, which would have pushed the unemployment rate approximately 3

percentage points higher than reported on a not seasonally adjusted basis. The

BLS and the Census Bureau said they were investigating the misclassification

error.

     --SERVICE JOBS REBOUND

     Total private payrolls rose by 3 million, led by marked gains in

service-producing industries like leisure and hospitality (up 1.2 million),

education and health services (up 424,000) and retail trade (up 367,800). Other

notable increases came from construction (up 464,000) and manufacturing (up

225,000) payrolls. Government payrolls fell by 585,000 in May.

     Net revisions for the previous two months were a positive 642,000, bringing

the three-month average loss to 6.5 million through May.

     The labor force participation rate inched up to 60.8% from 60.2% in April

and the employment-to-population ratio increased 52.8% after diving to 51.3% in

April. The U-6 rate, which captures discouraged workers, fell slightly to 21.2%

from 22.8% in April.

     --MORE HOURS 

     The length of the average work week increased to 34.7 hours from 34.1 in

March, yet another sign of people getting back to work.

     Average hourly earnings fell by 1.0% in May following a 4.7% spike in April

that was largely attributed to the widespread loss of lower-wage jobs. From a

year earlier, earnings rose 6.7%.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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