Dang! The DJIA rose +3.15% today! And the reason why it surged is going to be the theme of today’s report. Buckle up! Let’s talk unemployment!
U.S. Unemployment Rate Fell to 13.3% in May
The US labor market snapped back to life in May, restoring a chunk of the jobs it lost in the first 2 months of the pandemic. After 2 whole months of brutal carnage, employers added +2.5 million jobs last month! The most added in a single month on records dating back to 1948. This lowers the jobless rate to 13.3% compared to April’s 14.7%.
With all of that being said, hurdles remain – including the prospect of a second virus outbreak, pandemic-related safety regulations and social unrest. Economists still expect a slow and choppy recovery though.
Let’s keep this topic rolling!
Stocks Close Sharply Higher on Surprisingly Upbeat Jobs Report
US stocks ripped higher Friday after expectations-defying data showed the country added +2.5 million jobs in May! The Dow Jones Industrial Average jumped more than 800 points, extending its gains for the week to +6.8% – the best week for the blue-chip index since April 9.
Investors have been betting that the country will be able to both contain the spread of COVID-19 and reopen businesses in the coming months. Many are pricing in a “V-shaped” recovery. The Labor Department said the US added +2.5 million jobs in May – a stunning gain, given economists surveyed by The Wall Street Journal had expected a loss of -8.3 million jobs instead (20% unemployment).
Shares of cyclical companies, whose profits are closely tied to the economy’s trajectory, helped lead Friday’s stock rally – Caterpillar rose +4.8%, Boeing rose +11%, and Bank of America rose +5%.
Now let’s move more into where unemployment didn’t improve..
Where Employment Improved—and Where It Didn’t
Among goods-producing industries, manufacturing showed strong gains. In the services category, jobs in food services and drinking places rose by +1.4 million, accounting for about half of the gain in total nonfarm employment. On the other hand, government payrolls continued to shrink as steep declines in revenue forced cities and states to lay off workers.
The unemployment rate ticked down in both sexes, with the rate still higher for women, who are over-represented in sectors such as education, leisure and hospitality. Those jobs were hit hard by social-distancing measures because they involve close personal contact.
For those of you who were furloughed or unemployed during the pandemic – are you back to work now? How do you see yourself fitting into these graphs? Let me know in the comments below!