The May jobs report shows signs of labor-market acceleration as unemployment falls
- The US economy gained 559,000 jobs in May, falling just short of the median estimate of 674,000 payrolls.
- The unemployment rate dipped to 5.8% from 6.1%. Economists expected a drop to 5.9%.
- The data marks a fifth straight month of job additions and a strong acceleration from April.
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After a hugely disappointing April report, the US labor market’s recovery seems to be back on track, albeit not quite to the degree economists hoped.
The US economy added 559,000 nonfarm payrolls in May, the Bureau of Labor Statistics said Friday morning. Economists surveyed by Bloomberg held a median estimate of a 674,000-payroll gain. The reading shows a sharp acceleration from April’s dismal report, which saw job growth land well below economist forecasts.
The May increase marks a fifth straight month of job additions. The April payrolls count was revised to 278,000 from 266,000.
The unemployment rate fell to 5.8% from 6.1%. That came in below the median forecast for a decline to 5.9%.
The U-6 unemployment rate — which counts Americans marginally attached to the workforce and those working part-time for economic reasons — dropped to 9.7% on an unadjusted basis from 9.9%.
The labor-force participation rate dipped to 61.6% from 61.7%. The gauge has taken on new relevance through the pandemic as millions of Americans sit on the sidelines after leaving the workforce.
The measure also gives insight into the labor-shortage phenomenon that first emerged in April. Businesses reported difficulty finding skilled workers, particularly in low-paying service industries. The previous jobs report showed wages climbing at a faster-than-usual rate, signaling companies were paying up to attract workers.
Various factors have been linked to the market tightness. Virus fears could be keeping some from seeking work, as nearly half of all Americans still aren’t vaccinated against COVID-19. Childcare costs and schools’ summer breaks could also be keeping parents from their jobs.
Diving deeper into the report
The government’s monthly payrolls report is already among the most closely watched economic indicators, but April’s shocking print only added to the Friday release’s relevance. Apart from the headline figures, the report includes several other gauges that further detail the pandemic-era labor market.
Despite the payroll gains, roughly 9.3 million Americans remain unemployed. Job growth is expected to come in strong over the next few months as the economy reopens further and businesses rehire. Still, the sum of jobs lost to the pandemic places a full recovery well into the future.
The leisure and hospitality and education and health services sectors added the most jobs, with gains of 292,000 and 87,000 payrolls, respectively. The retail sector shed the most payrolls with a decline of 5,800.
Roughly 2.5 people said COVID-19 was the main reason they didn’t seek work throughout last month. That’s down from 2.8 million in April.
About 7.9 Americans cited the pandemic as the top reason why their employer closed down. That compares to the previous month’s reading of 9.4 million.
The number of people classifying their unemployment as temporary fell to 1.8 million from 2.1 million. That compares to a pandemic-era high of 18 million and the pre-crisis low of roughly 700,000 Americans.
Roughly 16.6% of working Americans telecommuted through May because of the pandemic. That’s down from 18.3% in April.
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