US unemployment rate drops in May as economy reopens
US unemployment rate dropped slightly in May as businesses have gradually reopened across the country, an encouraging sign for the COVID-19-battered labour market.
New data showed that the US unemployment rate dropped slightly in May as businesses have gradually reopened across the country, an encouraging sign for the COVID-19-battered labour market. US employers added 2.5 million jobs in May, and the unemployment rate fell slightly to 13.3 percent, Xinhua news agency quoted the Bureau of Labor Statistics (BLS) as saying in a report on Friday.
At a White House press conference, President Donald Trump touted the new job numbers, saying that the job surge is "widespread" and the nation will go back to have the "greatest economy" in the next few months.
Earlier data showed that the unemployment rate previously soared to a record 14.7 per cent in April, as COVID-19 continues to ravage the economy.
See Zee Business Live TV streaming below:
The 10.3-percentage-point jump from March is the largest over-the-month increase since records started being kept in January 1948.
The latest jobs report showed that the unemployment rate declined by 1.4 percentage points to 13.3 per cent in May, and the number of unemployed persons fell by 2.1 million to 21 million.
"These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the COVID-19 pandemic and efforts to contain it," the BLS said in the report.
"In May, employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade. By contrast, employment in government continued to decline sharply."
The report also showed that the labor force participation rate increased by 0.6 percentage point in May to 60.8 per cent, following a decrease of 2.5 percentage points in April.
Despite the improvements, the Bureau said the unemployment rate and the number of unemployed persons were up by 9.8 percentage points and 15.2 million, respectively, since February.
Since late April, many US states have started to reopen their economies, allowing certain non-essential businesses to operate under social distancing guidelines.
As of late May, all US states had been in some phase of reopening.
Manufacturing and services industries are also seeing signs of improvement, though at low levels.
The Purchasing Managers` Index (PMI) stood at 43.1 per cent in May, up 1.6 percentage points from the April reading, indicating a manufacturing contraction for the third straight month, the Institute for Supply Management (ISM) reported earlier this week.
The services sector contracted for the second straight month in May despite the gradual reopening, the ISM reported. The non-manufacturing index registered 45.4 per cent, 3.6 percentage points higher than the April reading.
Meanwhile, nationwide protests triggered by the death of George Floyd, an unarmed black man, have caused chaos in some cities as violence erupted between police and protesters, adding uncertainty to reopening efforts.
According to a recent projection by the Atlanta Federal Reserve, the second-quarter GDP will plunge by 52.8 per cent at an annualized rate.
It anticipated personal consumption expenditures, which make up about two thirds of the nation`s GDP, to fall 58.1 per cent in the quarter.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.