The U.S. economy gained 2.5 million jobs in May and the unemployment rate dropped to 13.3 percent. That’s down from 14.7 percent in April, according to the monthly employment report released Friday by the Bureau of Labor Statistics.
The surprising data comes amid the phased reopening of businesses across the country after months of economic pain from the coronavirus pandemic, which pushed up unemployment to Great Depression-era levels and obliterated all job gains since the Great Recession.
President Donald Trump was swift to celebrate the positive labor market news, tweeting three minutes after the release, "Really Big Jobs Report. Great going President Trump (kidding but true)!"
"We're going to be back higher next year than ever before," Trump said of the economy, during a briefing from the Rose Garden on Friday morning. "This shows that what we've been doing is right."
The Dow Jones Industrial Average soared after the numbers were released, rising by almost 800 points in premarket activity to settle just shy of 27,000 by mid-morning. The past few trading sessions on Wall Street have seen sharp gains for all three major averages as investors train their focus on the nation's reopening and any positive signs of a recovery.
“This recovery begins today,” Vice President Mike Pence told CNBC Friday morning. “We’re going to do whatever it takes to get the American people through this pandemic.”
The Federal Reserve has taken a series of extraordinary measures to shore up the nation's financial system during the crisis, and the government has poured trillions of dollars into the economy with its stimulus packages and the Paycheck Protection Program, designed to protect local businesses who might otherwise need to lay off employees.
Congress is currently considering another $3 trillion infusion into the economy that would extend various federal aid programs, including the $600 additional unemployment benefit that expires next month.
"The prospect of unemployment benefit enhancements ending may encourage more individuals to return to work," Moody's wrote in an investor note on Friday. "There is a risk, however, that as the PPP stimulus measures run their course, unless they are renewed or economic momentum has gained significant steam, the pace of rehiring will slow or could even reverse."
Still, the impact of the coronavirus pandemic will be felt for a decade and wipe almost $8 trillion off the nation's economic growth, the Congressional Budget Office said on Monday. The agency also projected that economic output would plunge by almost $16 trillion over the 2020–2030 period.
Friday's government data comes on the heels of another surprising set of data, the monthly employment numbers from private payroll processor ADP, which on Wednesday showed a total of 2.76 million people lost their job in May, a number far lower than the predictions of 8.75 million.
May’s figure is “obviously an awful number, but not as catastrophic as expected,” said Mark Zandi, chief economist at Moody’s Analytics, which prepares the report with ADP.
Additionally, jobless claims data released Thursday from the Department of Labor showed that the number of Americans seeking unemployment benefits continues to decline. Last week, around 1.8 million Americans filed for first-time jobless benefits. While still an outsized number, that total represents a continued contraction for an economic marker that has for weeks delineated the devastating human impact of the pandemic.
“The situation might be improving, but only ever so slightly. Far more needs to be done,” said Nick Bunker, Indeed Hiring lab’s director of economic research.