Quote from Savings Beagle on June 5, 2020, 2:42 pm

The May unemployment numbers were released this morning.  A number showing an additional 7-8 million jobs being lost was expected.

Instead, the report showed roughly 2.5 million jobs were ADDED in May.

As a result, the unemployment rate ticked down to 13.3% from last month's 14.7% number.

To say this result was completely unexpected would be an understatement.

Yes, some states began loosening their lockdown and stay-at-home orders, but enough to completely counter job losses?

Here are a couple of likely reasons why jobs were added rather than lost in May.

 - The leisure and hospitality category was one of the hardest-hit employment sectors thanks to the Covid shutdowns.  Restaurants make up a large portion of that category, and were one of the areas states moved to re-open first - with stringent requirements in place.  Of the 2.5 million jobs added, 1.2 million were leisure and hospitality related.  So, that increase makes sense.

- Additionally, the relief money appropriated for small and medium-sized businesses likely kicked into high gear, allowing some workers to be recalled in May.

- And numerous states moved to open retail and manufacturing in May, likely adding to the increased jobs, the holders of which had been counted as unemployed in April. In fact, retail, alone, added 368,000 jobs in May.

You can read the full Bureau of Labor Statistics May Jobs Report here if you like.

So, while many expected job losses to continue, the re-opening of many states led to a decrease in lost jobs and a significant increase in employment.

Make no mistake, though, a 13.3% unemployment rate is still horrible.

Maybe, as state openings continue, we'll see the job numbers further improve and the overall unemployment rate drop.

Just keep in mind, most of the employment moves we see right now are directly related to government-mandated shutdowns, not economic factors.

The shutdowns, however, have caused significant economic disruptions, which very well may reverberate in the coming months and be evidenced as economic-related job losses.

It was United Airlines which made a statement last month that come October, when government subsidies run out, approximately 30% of its workforce will be laid off if business doesn't return to somewhat normal operating levels.

A plan-of-action likely in place in many businesses as psychology takes over as the hindering factor, rather than government shutdowns, when it comes to consumers returning to normal behaviors.

Let's take an employment win while we have it, and hope for the best in the coming months.