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US Unemployment Drops Unexpectedly to 13.3%

US Unemployment Drops Unexpectedly to 13.3%
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By The Associated Press
Jun. 05, 2020 | WASHINGTON
By The Associated Press Jun. 05, 2020 | 08:30 AM | WASHINGTON
The U.S. unemployment rate fell unexpectedly in May to 13.3% as states loosened their coronavirus lockdowns and businesses began recalling workers.

The government said Friday that the economy added 2.5 million jobs last month, driving unemployment down from 14.7% in April.

Stocks surged on Wall Street on the news, with the Dow Jones gaining 800 points to over 27,100 in the opening hour.

The May job gain, which confounded economists' expectations of another round of severe losses, suggests that thousands of stores, restaurants, gyms and other companies reopened and rehired more quickly than many analysts had forecast.

“The surprising thing here is the timing and that it happened as quickly as it did,” said Adam Kamins, senior regional economist at Moody’s Analytics.

Economists had expected the government to report that employers shed 8.5 million more jobs last month on top of 21.4 million lost in March and April.

Instead, nearly all industries added jobs, a sharp reversal from April, when almost all cut them. Hotels and restaurants added 1.2 million jobs in May, after shedding 7.5 million. Retailers gained 368,000, after losing nearly 2.3 million in the previous month. Construction companies added 464,000 after cutting 995,000.

Other evidence has also shown that the job-market meltdown triggered by the coronavirus has bottomed out. The number of people applying for unemployment benefits has declined for nine straight weeks. And the total number of Americans receiving such aid has essentially leveled off.

Businesses are reporting signs of progress even in hard-hit industries. American Airlines, for example, said this week that it will fly 55% of its U.S. routes in July, up from just 20% in May.

And the Cheesecake Factory said one-quarter of its nearly 300 restaurants have reopened, though with limited capacity. Sales are at nearly 75% of the levels reached a year ago, the company said.

Erica Groshen, a labor economist at Cornell University and a former commissioner of the Labor Department’s Bureau of Labor Statistics, said hiring could ramp up relatively quickly in the coming months.

 

 

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