The government reported on Friday that the unemployment rate fell to 13.3% last month after surging to 14.7% in April, an unexpected positive change that suggested a recession caused by a pandemic might have hit rock bottom.
Most analysts expect the rate to continue to rise, perhaps as high as 20%.
But on the contrary, employers also added 2.5 million jobs in May after losing 20.7 million positions in the previous month, according to the Bureau of Labor Statistics.
“We will return and we will open our country,” President Trump said in a hastily arranged appearance on Friday at the White House Rose Garden. He urged countries to continue to loosen coronavirus restrictions.
Democrats note that the country is still suffering from the biggest unemployment crisis since the Great Depression.
“And Trump said he was happy?” said Tom Perez, chairman of the Democratic National Committee. “Families are struggling. The hospital is overwhelmed. Business has been closed forever. And Americans are dying every day – all this can be prevented. “
Unemployment and employment statistics in California for May will be released in two weeks and will likely follow the country’s rebound, largely due to a mix of industries and the fact that it is slower to lift business restrictions and restrictions. The state unemployment rate in April was 15.5%.
The increase reflects the reopening of business in many parts of the country, and it was a big surprise for analysts.
The average economist expects another loss of around 7.5 million jobs in May, according to Moody’s Analysis.
Moody’s labor economist Sophia Koropeckyj notes that the collection rate for the survey of domestic work and salaries – from which unemployment and employment figures are derived – is lower than normal.
And government statisticians say the actual unemployment rate in May might be 3 percentage points higher because many people might have misclassified themselves by saying they are absent from work, even though they were laid off and should be counted as unemployment.
Although the report provides good news, most mainstream economists worry that the recovery will be long and slow.
“Reflection starts again earlier than expected, but don’t get too excited about this one month’s data,” said Nick Bunker, director of research at Indeed Hiring Lab. “Job growth rose by 2.5 million and the unemployment rate fell by more than a percentage point is a positive development. But it is not clear how this will last long. In addition, the labor market is still in a terrible place with jobs only 87% of the places before the coronavirus crisis began. “
No matter how quickly or fully America opens its doors to business again, many analysts say, a full recovery is expected to take at least three to five years. If a second large wave of infection occurs in the fall, as epidemiologists say in at least in some parts of the country, the prospect can become darker.
“The hole we are in is very deep,” said Heidi Shierholz, former chief economist at the US Department of Labor and now with the Institute for Economic Policy. “Even if you get a quick reflection back, it can still be bad. I think it will be long. “
Before Friday’s report, David Shulman, a senior UCLA economist, said he expected May to be the lowest point of the recession. “Now it looks like April is the basis,” he said.
Shulman said he and his colleagues at UCLA Anderson Forecast are now likely to revise their views, to be released June 24. Earlier he said unemployment for the country and nation was likely to remain in double digits until 2022. “That might be off the table,” he said.
At the same time, Shulman and other economists said the latest jobs report appeared to be inconsistent with government data showing more than 31 million people received unemployment benefits in May. “So do 10 million people receive salaries from employers and collect unemployment benefits as well?” asked Christopher Rupkey, chief financial economist at MUFG Bank in New York.
What’s more, last week’s national protest was just a complicated matter, with economic uncertainty created by damage to businesses and the potential increase in COVID-19 infections as a result of people leaving social distance in mass demonstrations.
Stephen Moore, a member of President Trump’s economic task force, also predicted the increasing economic suffering as a result of protests: “These riots are making a new round in all respects. That’s bad from an economic perspective. Right when the business starts to reopen and we start making a little progress – then boom! – we got hit by this. “
