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Unemployment in U.S. Unexpectedly Fell in May: Live Updates Unemployment in U.S. Unexpectedly Fell in May: Live Updates
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The unemployment rate fell to 13.3 percent in May, the Labor Department said Friday, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. The job market unexpectedly reversed its free fall in May as employers brought back millions of workers after pandemic-induced layoffs and the unemployment rate declined.
Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. Tens of millions remain out of work, and the unemployment rate, which fell to 13.3 percent from 14.7 percent in April, remains higher than in any previous postwar recession.
But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. But employers added 2.5 million jobs in May, the Labor Department said Friday, defying economists’ expectations of further losses and offering hope that the rebound from the pandemic-induced economic crisis could be faster than forecast.
“These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April,” the Labor Department said in its release. Still, job openings remain far below normal, and the trillions of dollars in government assistance that have helped keep the economy on life support may be nearing their end.
The report noted that “employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade,” even as jobs in the government continued their decline.The report noted that “employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade,” even as jobs in the government continued their decline.
Specifically, the leisure and hospitality sector hired about 1.2 million workers, after declining by 7.5 million in April and 743,000 in March. Restaurant jobs alone rose by 1.4 million, counting for about half of the total gain in employment, the Labor Department said.
“What this is telling us is that at least part of the pain in April was due to people being laid off or furloughed who still had very strong connections to their employers,” Ernie Tedeschi, an economist at Evercore ISI in Washington said. “As good and surprising as this report was, this may just be the low-hanging fruit. These may have been the easiest workers to bring back.”“What this is telling us is that at least part of the pain in April was due to people being laid off or furloughed who still had very strong connections to their employers,” Ernie Tedeschi, an economist at Evercore ISI in Washington said. “As good and surprising as this report was, this may just be the low-hanging fruit. These may have been the easiest workers to bring back.”
Restaurants and bars, health care employers and construction were among the sectors that drove the May job market improvement, based on the Labor Department’s report.
About 1.4 million people gained or took back their restaurant jobs, even as hotels continued to shed workers. About 460,000 were hired or rehired in construction, 370,000 in retail, and 390,000 in health care and social assistance. That latter boost came heavily from dentist’s offices, which took back some 245,000 workers.
The data tells the story of an employment rebound as the state and local economies began to reopen and Paycheck Protection Program checks went out, spurring rehiring and bringing workers back onto payrolls.
“The economy is still being very much buffered by stimulus,” said Michelle Meyer, head of U.S. economics at Bank of America. “When that starts to wane, we will learn a lot more about the underlying health of the recovery.”
Ms. Meyer noted that more than half of the job gains in May — 1.4 million — were in restaurants and bars, many of which probably received assistance under the government’s Paycheck Protection Program. Friday’s report suggests that the program, along with other elements of the government’s response, helped offset at least some of the economic damage.
Unemployment for Hispanic workers and white workers dropped sharply in May, while the jobless rate for black adults remained high.
Joblessness for white adults fell to 12.4 percent from 14.2 percent the prior month, and Hispanic worker unemployment declined to 17.6 percent from 18.9 percent. For black workers, however, joblessness was up slightly to 16.8 percent, and unemployment for Asians also increased, to 15 percent from 14.5 percent.
Construction and leisure and hospitality, sectors where Hispanic workers are heavily represented, rebounded sharply in May. Though it is too soon to tell with just one month of data, it could also reflect the beginning of a common recession pattern: job losses for black workers often continue even as the tide turns and white workers in particular begin to return to work.
Stocks on Wall Street rallied on Friday, resuming a climb that has lifted the S&P 500 to within 10 percent of its record high, after the U.S. government reported a surprising uptick in hiring in May.
The S&P 500 rose more than 2 percent in early trading, and shares in Europe were 1 percent to 2 percent higher.
Financial markets have been on an upward trajectory for weeks, as investors have responded to signs around the world that businesses were slowly but steadily returning to normal. In Europe, shares have been boosted by renewed efforts by policymakers to bolster the region’s economy.
Shares were already higher before the government reported an unexpected round of hiring in May, stock market futures shot sharply higher after the report, along with prices for crude oil, and yields on U.S. Treasury bonds, suggesting the jobs numbers delivered an unexpected jolt of economic optimism to investors.
“These numbers certainly are hard to comprehend,” wrote Chris Rupkey, chief financial economist for MUFG Union Bank. “But the good news is that the bottom of the labor market downturn has been hit.”
Oil prices rose on Friday on expectations that the Organization of the Petroleum Exporting Countries, Russia and other producers will agree on Saturday to extend their production cuts by an additional month through July. These countries originally agreed on April 12 to trim production by a combined 9.7 million barrels a day or about 10 percent of global supplies in normal times. Production was supposed to begin rising gradually after June.
The producers are expected to meet by videoconference Saturday to agree on the extension and other matters, analysts said. OPEC has not yet confirmed that the meeting will occur.
Analysts say that extending the cuts could put further upward lift on oil prices, which have already risen sharply from their April plunge. On Friday, Brent crude, the international benchmark, was up about 3 percent to $41.22 a barrel while West Texas Intermediate, the key American crude, was up about 2 percent.
President Trump exulted in the surprisingly positive monthly jobs report released on Friday morning, taking to Twitter to claim credit for the improvement and attack his presumptive Democratic opponent on the economy.President Trump exulted in the surprisingly positive monthly jobs report released on Friday morning, taking to Twitter to claim credit for the improvement and attack his presumptive Democratic opponent on the economy.
The report showed the economy added 2.5 million jobs in May and the unemployment rate fell to 13.3 percent, signs that the labor market has begun to rebound from its lows of the coronavirus recession.The report showed the economy added 2.5 million jobs in May and the unemployment rate fell to 13.3 percent, signs that the labor market has begun to rebound from its lows of the coronavirus recession.
Mr. Trump claimed credit: “Really Big Jobs Report. Great going President Trump (kidding but true)!” he wrote on Twitter.Mr. Trump claimed credit: “Really Big Jobs Report. Great going President Trump (kidding but true)!” he wrote on Twitter.
He announced a 10 a.m. news conference to discuss the numbers, then tweeted the comments of several television commentators who expressed surprise and delight at the jobs report. He later took a shot at his Democratic opponent, former Vice President Joseph R. Biden Jr.He announced a 10 a.m. news conference to discuss the numbers, then tweeted the comments of several television commentators who expressed surprise and delight at the jobs report. He later took a shot at his Democratic opponent, former Vice President Joseph R. Biden Jr.
“Oh no, the Dems are worried again,” Mr. Trump wrote. “The only one that can kill this comeback is Sleepy Joe Biden!”“Oh no, the Dems are worried again,” Mr. Trump wrote. “The only one that can kill this comeback is Sleepy Joe Biden!”
Stocks on Wall Street were poised to rise on Friday, picking up a rally that has lifted the S&P 500 to within 10 percent of its record high as the U.S. government reported a surprising uptick in hiring in May.
Futures indicated that stocks would jump at the start of trading, and shares in Europe were 1 percent to 2 percent higher.
Financial markets have been on an upward trajectory for weeks, as investors have responded to signs around the world that businesses were slowly but steadily returning to normal. In Europe, shares have been boosted by renewed efforts by policymakers to bolster the region’s economy.
Shares were already higher before the government reported an unexpected round of hiring in May, but the news boosted stocks further.
Oil prices rose on Friday on expectations that the Organization of the Petroleum Exporting Countries, Russia and other producers will agree on Saturday to extend their production cuts by an additional month through July. These countries originally agreed on April 12 to trim production by a combined 9.7 million barrels a day or about 10 percent of global supplies in normal times. Production was supposed to begin rising gradually after June.
The producers are expected to meet by videoconference Saturday to agree on the extension and other matters, analysts said. OPEC has not yet confirmed that the meeting will occur.
Analysts say that extending the cuts could put further upward lift on oil prices, which have already risen sharply from their April plunge. On Friday, Brent crude, the international benchmark, was up about 3 percent to $41.22 a barrel while West Texas Intermediate, the key American crude, was up about 2 percent.
In late March, Brooks Brothers was showered with praise after announcing it would use its three clothing factories in the United States to make personal protective equipment to help fight the coronavirus.In late March, Brooks Brothers was showered with praise after announcing it would use its three clothing factories in the United States to make personal protective equipment to help fight the coronavirus.
Now those factories may become casualties of the coronavirus, and the future of Brooks Brothers — not to mention its identity as the ultimate “Made in America” brand, one that has dressed presidents and former presidents dating to James Madison — is uncertain.Now those factories may become casualties of the coronavirus, and the future of Brooks Brothers — not to mention its identity as the ultimate “Made in America” brand, one that has dressed presidents and former presidents dating to James Madison — is uncertain.
Brooks Brothers plans to lay off nearly 700 employees this summer at the factories, in Massachusetts, New York and North Carolina. The company is also trying to find buyers for the factories by mid-July, and expects to close them if it can’t.Brooks Brothers plans to lay off nearly 700 employees this summer at the factories, in Massachusetts, New York and North Carolina. The company is also trying to find buyers for the factories by mid-July, and expects to close them if it can’t.
In an interview, Claudio Del Vecchio, the 63-year-old Italian industrialist who bought Brooks Brothers in 2001 and was responsible for acquiring the factory in Massachusetts, spoke for the first time about the decision to divest from the vertical made-in-America supply chain.In an interview, Claudio Del Vecchio, the 63-year-old Italian industrialist who bought Brooks Brothers in 2001 and was responsible for acquiring the factory in Massachusetts, spoke for the first time about the decision to divest from the vertical made-in-America supply chain.
“I feel very bad about this,” Mr. Del Vecchio said. But he added, “The factories never made money for us, and at this moment all resources need to be maintained and saved to make sure we can come out on the other side of the crisis.”“I feel very bad about this,” Mr. Del Vecchio said. But he added, “The factories never made money for us, and at this moment all resources need to be maintained and saved to make sure we can come out on the other side of the crisis.”
Faced with plunging sales that have already led to tens of millions of layoffs, companies are trying to renegotiate their office and retail leases — and in some cases refusing to pay — in hopes of lowering their overhead and surviving the worst economic downturn since the Great Depression. This has given rise to fierce negotiations with building owners, who are trying to hold the line on rents for fear that rising vacancies and falling revenue could threaten their own survival.Faced with plunging sales that have already led to tens of millions of layoffs, companies are trying to renegotiate their office and retail leases — and in some cases refusing to pay — in hopes of lowering their overhead and surviving the worst economic downturn since the Great Depression. This has given rise to fierce negotiations with building owners, who are trying to hold the line on rents for fear that rising vacancies and falling revenue could threaten their own survival.
Simon Property Group, the biggest mall operator in the United States, this week sued Gap, the owner of retail chains that include Old Navy and Banana Republic, for nearly $66 million in unpaid rent for April, May and June, according to a lawsuit filed in Delaware this week.Simon Property Group, the biggest mall operator in the United States, this week sued Gap, the owner of retail chains that include Old Navy and Banana Republic, for nearly $66 million in unpaid rent for April, May and June, according to a lawsuit filed in Delaware this week.
In many cases, the strongest tenants — those most able to pay — are driving the hardest for a discount. They include brand-name companies like LVMH, the luxury goods conglomerate that owns Sephora and other outlets; and Starbucks, which had $2.6 billion of cash on hand at the end of March and would have little problem selling stock or bonds to raise more money.In many cases, the strongest tenants — those most able to pay — are driving the hardest for a discount. They include brand-name companies like LVMH, the luxury goods conglomerate that owns Sephora and other outlets; and Starbucks, which had $2.6 billion of cash on hand at the end of March and would have little problem selling stock or bonds to raise more money.
Beyond the immediate impact of business closings on tenants’ revenue are larger questions, including the already-dire trends for malls and shopping centers, how office and consumer behavior might change after the pandemic, and the effects of recent looting and vandalism on retail corridors. Will companies need more space so that employees can spread out, or will they need less because they need fewer offices at all?Beyond the immediate impact of business closings on tenants’ revenue are larger questions, including the already-dire trends for malls and shopping centers, how office and consumer behavior might change after the pandemic, and the effects of recent looting and vandalism on retail corridors. Will companies need more space so that employees can spread out, or will they need less because they need fewer offices at all?
Raytheon Technologies, one of the country’s biggest defense contractors, recently cut salaries for thousands of employees as the pandemic crimped business. Around the same time, it also quietly made a change to the pay package of its chief executive, Gregory J. Hayes, that could increase his future income by millions of dollars.
Last Friday, after the market closed, Raytheon disclosed in a filing that it had tweaked how it calculates certain stock-related payouts owed to senior executives and employees. The filing did not state by how much Mr. Hayes or others stood to benefit.
The change led to an estimated $12.5 million gain for Mr. Hayes on his recent equity awards, Raytheon later told The New York Times. The company said the change was necessary to ensure that Mr. Hayes and 3,900 employees — about 2 percent of its work force — did not lose compensation they had already been awarded.
But some analysts said the change undermined Raytheon’s commitment to use pay to keep executives’ interests in line with those of shareholders. Publicly traded companies have come under pressure to structure stock-related compensation in a way that creates incentives for executives to improve long-term performance and not just seek to enrich themselves in the short term.
Gap, one of the biggest U.S. retailers with its namesake, Old Navy and Banana Republic chains, said on Thursday that net sales in the first quarter plummeted 43 percent to $2.1 billion and that it posted a net loss of $932 million. The company, which has nearly 2,800 stores in North America, said that it had reopened more than 1,500 locations and expected the “vast majority” of stores to be open by the end of June.Gap, one of the biggest U.S. retailers with its namesake, Old Navy and Banana Republic chains, said on Thursday that net sales in the first quarter plummeted 43 percent to $2.1 billion and that it posted a net loss of $932 million. The company, which has nearly 2,800 stores in North America, said that it had reopened more than 1,500 locations and expected the “vast majority” of stores to be open by the end of June.
Slack, the business communication platform, said in a regulatory filing that its first-quarter revenue rose 50 percent to $201.7 million from the same period last year. The chat service reported a loss of 2 cents per share in the quarter, which ended April 30, an improvement over a loss of 23 cents a share in first quarter of 2019. But the results disappointed investors, who expected greater growth during the pandemic, and its shares plunged 15 percent in after-hours trading.Slack, the business communication platform, said in a regulatory filing that its first-quarter revenue rose 50 percent to $201.7 million from the same period last year. The chat service reported a loss of 2 cents per share in the quarter, which ended April 30, an improvement over a loss of 23 cents a share in first quarter of 2019. But the results disappointed investors, who expected greater growth during the pandemic, and its shares plunged 15 percent in after-hours trading.
Reporting was contributed by Conor Dougherty, Peter Eavis, Ben Casselman, Anupreeta Das, Peter Eavis, Vanessa Friedman, Mohammed Hadi, Sapna Maheshwari, Gregory Schmidt, Carlos Tejada and Kevin Granville.Reporting was contributed by Conor Dougherty, Peter Eavis, Ben Casselman, Anupreeta Das, Peter Eavis, Vanessa Friedman, Mohammed Hadi, Sapna Maheshwari, Gregory Schmidt, Carlos Tejada and Kevin Granville.