The Shocking News in the Unemployment Report

Dated: June 9 2020

Views: 6



Last Friday, the U.S. Bureau of Labor Statistics released their May Employment Situation SummaryLeading up to the release, most experts predicted the unemployment rate would jump up to approximately 20% from the 14.7% rate announced last month.

The experts were shocked.

The Wall Street Journal put it this way:

“The May U.S. jobless rate fell to 13.3% and employers added 2.5 million jobs, blowing Wall Street expectations out of the water: Economists had forecast a loss of 8.3 million jobs and a 19.5% unemployment rate.”

In addition, CNBC revealed:

“The May gain was by far the biggest one-month jobs surge in U.S. history since at least 1939.”

Here are some of the job gains by sector:

  • Food Service and Bartenders – 1,400,000
  • Construction – 464,000
  • Education and Health Services – 424,000
  • Retail – 368,000
  • Other Services – 272,000
  • Manufacturing – 225,000
  • Professional Services – 127,000

There’s still a long way to go before the economy fully recovers, as 21 million Americans remain unemployed. That number is down, however, from 23 million just last month. And, of the 21 million in the current report, 73% feel their layoff is temporary. This aligns with a recent Federal Reserve Bank report that showed employers felt 75% of the job losses are temporary layoffs and furloughs.

The Employment Situation Summary was definitely a pleasant surprise, and evidence that the country’s economic turnaround is underway. The data also offers a labor-market snapshot from mid-May, when the government conducted its monthly survey of households and businesses. Many states did not open for business until the second half of May. This bodes well for next month’s jobs report.

Bottom Line

We cannot rejoice over a report that reveals millions of American families are still without work. We can, however, feel relieved that we are headed in the right direction, and much more quickly than most anticipated.

Note: In its original report, the BLS explained that a misclassification error could have occurred over the last 3 months, starting in March of 2020. Readjusting for this error, the unemployment rate would actually show a drop from 19.7% in April to 16.3% in May. Nobody would say the original report of 13.3% unemployment was a good number, nor is the revised 16.3%. What is a positive move for our country and the economy is the significant drop in the rate from April to May, meaning more people are getting jobs than losing them. That’s the key takeaway.

Blog author image

Alex Ortiz

I started my real estate journey in 2001 as an assistant and in 2004 earned my Real Estate Licence. Since then I have gone through my own buying and selling experience, became an entrepreneur in vario....

Latest Blog Posts

Is Buying a Home Today a Good Financial Move?

Is Buying a Home Today a Good Financial Move?There’s no doubt 2020 has been a challenging year. A global pandemic coupled with an economic recession has caused heartache for many. However, it

Read More

Don’t Let Buyer Competition Keep You from Purchasing a Home

Don’t Let Buyer Competition Keep You from Purchasing a HomeThis year’s record-low mortgage rates sparked high demand among homebuyers. Current homeowners, however, haven’t put

Read More

It Pays to Sell with a Real Estate Agent

It Pays to Sell with a Real Estate AgentSome HighlightsToday, it’s more important than ever to have an expert you trust to guide you as you sell your house.From your safety throughout the

Read More

Video: The Winter Housing Market Forecast Won't Be Chilly

The Winter Housing Market Forecast Won't Be Chilly - November 19, 2020According to experts, the housing market is not forecasted to cool off this winter. Let's connect to make sure you're ready to

Read More