Statistics Canada reports a record high unemployment rate as the economy added 289,600 jobs in May, with businesses reopening as authorities eased public health restrictions linked to the novel coronavirus pandemic.
"You're seeing some abatement of some of the historic job losses that we've been witnessing these last two months, which is exactly what you would expect to happen when the economy starts to open back up", said Philip Noftsinger, executive vice president at CBIZ. While much of the movement back to the workplace is attributed to the return of employees temporarily laid off due to stay-at-home orders, the number of people who lost their jobs permanently continued to rise in May, increasing by 295,000 to 2.3 million, according to the Department.
The report attributed the improvements to "a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it". A separate survey of employers determines how many jobs were added or lost.
After months of criticism over his hit-and-miss handling of the pandemic and outrage among even some top former aides over his suggestion of a military crackdown or police brutality against protesters, Trump is at the lowest ebb of his presidency. Around 20 percent of Americans without a high school diploma were without a job in May, compared to about 6 percent just three months ago, before the coronavirus outbreak. In contrast, the jobless rate for whites fell to 12.4 per cent from 14.2 per cent in April. However, the unemployment rate for the sector was only 5 percent in May 2019.
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Low-flying choppers were also used in an apparent show of force above protesters in Washington, DC on Monday night. Sharpton condemned Trump, who has been widely criticized for his response to Floyd's death and the protests.
Government payrolls, however, extended declines, with these falling by 585,000 after a drop of 963,000 in April. U.S. Treasury prices fell. Most economists expected the jobless rate would climb further to almost 20% in May, reflecting those still unemployed amid ongoing virus-related business disruptions.
Trump clearly didn't want to mar the good news on jobs, which he hopes will provide a path to regaining his once seemingly solid march toward a second term in November. There were more job losses in the information, mining, transportation and warehousing industries. Child care services also added 44,000 jobs.
Ian Shepherdson of Pantheon Macroeconomics, one of few who anticipated positive news in the jobs data, called the report, "The biggest payroll surprise in history, by a huge margin", which he said "likely is due to a wave of hidden rehiring".
"We really need a new way to talk about recessions and recoveries in a post-Covid world", Diane Swonk, chief economist for Grant Thornton, said in a research note. The Purchasing Managers' Index (PMI) stood at 43.1 percent 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.
In the aftermath of the pandemic, USA employers would have to replicate the strong gains from the May jobs report for the next seven months to return the country to where it was in February. But economists say the pace of hiring will then likely lag as a severe recession and high unemployment hold back consumer spending, the main driver of the economy.