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%.
Stock market futures burst higher following the report and indicated an open of nearly 600 points higher for the Dow Jones Industrial Average.
The May gain was by far the biggest one-month jobs gain in U.S. history since at least 1939.
“Barring a second surge of Covid-19, the overall U.S. economy may have turned a corner, as evidenced by the surprise job gains today, even though it still remains to be seen exactly what the new normal will look like,” said Tony Bedikian, head of global markets at Citizens Bank.
The jump in employment almost perfectly mirrored the 2.7 million decrease in workers who reported being on temporary layoff.
Leisure and hospitality workers made up almost half the increase, with 1.2 million going back to work after a reported loss of 7.5 million in April. Jobs in bars and restaurants increased by 1.4 million as states began to relax social distancing measures.
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