The Reversal Begins in US, as Unemployment Rate Declines in May
Despite the dive in manufacturing and particularly services during the last few months as a result of the coronavirus lockdown, the hole in unemployment became really worrying. The unemployment rate jumped to 14.7% in the previous two months and it was expected to jump again close to 20%. But, the unemployment rate declined instead, even though the participation rate increased. So, the unemployment rate should have been lower.
- Change in Nonfarm payroll 2,509K vs -7,500K estimate. Prior month revised to -20,687K vs -20,537K estimate
- two month Prior month revised -642K
- Unemployment rate 13.3% vs. 19% estimate. Prior month 14.7%
- Change in private payroll 3094K vs -6750K estimate. Prior month -19724K vs. -19557K
- Change in Manufacturing jobs plus 225K vs. -400K estimate
- Average weekly hours 34.7 vs. 34.3 estimate
- Average hourly earnings MOM -1.0% vs. +1.0 estimate
- Average hourly earnings YoY 6.7% vs. 8.5% estimate
- Participation rate 60.8% vs. 60.1% estimate. Last month 60.2%
- Service sector rose by 2.4 million
- goods producing jobs increase 669K vs -2373K last month
A breakdown of the sectors shows:
- Leisure and hospitality showed a gain of 1.239 million vs. -7.539 last month
- Eetail trade increased by 368K vs -2286K last month
- Education, health increase by 424K vs -2590K last month
- Business services rose by 127K vs.-2189K last month
- Construction jobs rose 464K vs -995K last month
- Government jobs fell -585K vs -963K last month
- Financial rose 33K va -264K last month
- Information-38K vs -272K last month
- Trade, transport +368K vs -3225Klast month
Well, this is a nice surprise. Employment increased by 2,509K against a decline of 7,500K expected. The unemployment rate has already declined as the country started to reopen by the end of May, so the number should be much better for June. Although, the protests and the destruction will have a negative impact.
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