May sees biggest jobs increase ever of 2.5 million as economy starts to recover from coronavirus

NBC:

  • Nonfarm payrolls rose by 2.5 million in May and the unemployment rate fell to 13.3%.
  • Wall Street estimates had been for a decline of 8.3 million and a jobless level of 19.5%, which would have been the worst since the Great Depression era.
  • Much of the gain came from those classified as temporary layoffs due to the coronavirus-related economic shutdown.
  • Leisure and hospitality represented almost half the jobs gained.

Employment stunningly rose by 2.5 million in May and the jobless rate declined to 13.3% according to data Friday from the Labor Department that was far better than economists had been expecting and indicated that an economic turnaround could be close at hand.

Economists surveyed by Dow Jones had been expecting payrolls to drop by 8.333 million and the unemployment rate to rise to 19.5% from April’s 14.7%. If Wall Street expectations had been accurate, it would have been the worst figure since the Great Depression. As it turned out, May’s numbers showed the U.S. may well be on the road to recovery after its fastest plunge in history.

Stock market futures burst higher following the report and indicated an open of nearly 600 points higher for the Dow Jones Industrial Average. Government bond yields raced higher as well, with the benchmark 10-year Treasury most recently at 0.91%.

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