Per Marketwatch, in a big surprise, the government said the economy added 2.5 million jobs in May and the unemployment rate fell. Economists polled by MarketWatch had predicted the loss of 7.25 million jobs. The unemployment rate slipped to 13.3% from 14.7%, though the Bureau of Labor Statistics said the rate would have been 3 points higher if households answered their forms correctly. The loss of jobs in April was revised up to 20.7 million from 20.5 million.
Yahoo reports the May jobs report showed an unexpected rise in the number of non-farm payrolls in the economy and a drop in the unemployment rate from April, averting what economists expected would be a rise in the jobless rate to the highest level since the Great Depression amid the coronavirus pandemic.
The Labor Department released the May jobs report Friday at 8:30 a.m. ET. Here were the main results from the report, compared to Bloomberg consensus data:
Change in non-farm payrolls: +2.509 million vs. -7.5 million expected and -20.687 million in April
Unemployment rate: 13.3% vs. 19.0% expected and 14.7% in April
Average hourly earnings month on month: -1.0% vs. +1.0% expected and +4.7% in April
Average hourly earnings year on year: +6.7% vs. +8.5% expected and +8.0% in April
The Labor Department’s surveys captured the period including the 12th of the month, meaning the May report included the very early stages of reopening in some parts of the U.S. amid the coronavirus outbreak. But the rise in non-farm payrolls still exceeded all economist expectations, with no economists included in Bloomberg’s survey having predicted a rise in jobs during the month of May.
“Total nonfarm payroll employment increased by 2.5 million in May, reflecting a limited resumption of economic activity that had been curtailed due to the coronavirus pandemic and efforts to contain it,” the BLS said in its statement Friday.
The private services sector recovered 2.425 million payrolls in May after shedding 17.351 million in April. Leisure and hospitality – far and away the hardest-hit industry group in April, with more than 7.5 million jobs lost – saw the largest rebound, with 1.24 million positions added in May.
UPDATE – Per SFGate:
When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.
The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May. But that would still be an improvement from an unemployment rate of about 19.7 percent for April, applying the same standards.
The Bureau of Labor Statistics, the agency that puts out the monthly jobs reports, said it was working to fix the problem.