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The surprising May jobs report on Friday showed the U.S. economy added 2.5 million jobs last month, with the unemployment rate declining to 13.3% from 14.7%.
Economists polled by MarketWatch had expected a loss of 7.25 million jobs and an unemployment rate of 19.0%
See:U.S. regained 2.5 million jobs in May, unemployment falls to 13.3%
Below are some initial reactions from analysts and economists, as U.S. stocks SPX, +2.12% DJIA, +2.60% trade sharply higher following the data.
• “The biggest payroll surprise in history, by a gigantic margin, likely is due to a wave of hidden rehiring. Businesses which let people go in large numbers in March didn’t need to post their intention to bring people back on. Indeed, they just needed to call/text/email. Still, it’s a mystery why ADP didn’t pick this up, and it contradicts the continuing claims numbers, up 3 milliion between the April and May survey weeks. One possibility is that many people let go during the lockdowns didn’t make a recorded unemployment claim, either because they thought they would not qualify, or because their filing was caught up in backlogs.” —Ian Shepherdson, chief economist at Pantheon Macroeconomic
Related:Private sector shed 2.76 million jobs in May, ADP says, far less than forecast
• “Okay, so nonfarm employment shows payrolls starting to recover—up 2.5 million in May—but payrolls are still down by nearly 20 million since February. We remain in a very, very deep hole.” —Betsey Stevenson, professor of public policy and economics at the University of Michigan and former chief economist at the Labor Department
• “WTF.” —Kate Bahn, director of labor market policy and economist at the Washington Center for Equitable Growth
• “The bounceback started earlier than most expected, but don’t get too excited about this one month of data. Job growth rising by 2.5 million and the unemployment rate dropping by over a percentage point are positive developments, but it’s not clear how enduring this will be. Furthermore, the labor market is still in a terrible spot with employment only 87% of where it was before the coronavirus crisis began.” —Nick Bunker, economic research director at jobs website Indeed
• “The story here appears to be a partial recovery in the sectors that were worst hit in April. Especially leisure and hospitality, and retail.” —Ernie Tedeschi, economist at Evercore ISI
• “Nonfarm payrolls ROSE 2.509 million in May. They were expected to fall 7.5 million. That’s a 10 million miss against the consensus. Maybe all those crazy equity traders knew something after all.” —Chris Low, chief economist at FHN Financial
• “Note that we are still 13 percent below the level of employment pre-crisis, and the unemployment rate of 13.3% is the second-highest level since the Great Depression. This still represents an unbelievable amount of distress for almost 21 million households across the country.” —Mike Fratantoni, chief economist at the Mortgage Bankers Association
• “In the greatest miss in forecasting history, the May jobs report demonstrated that America is going back to work. … This report needs to be put in context—the economy is still in a deep recession. However, it is also clear that the recovery has begun, and that it is ahead of schedule.” —David Donabedian, chief investment officer at CIBC Private Wealth Management
