Unemployment Rate Declines in May Just as Nonfarm Employment Rises Sharply

According to the Bureau of Labor Statistics (BLS) total nonfarm payroll in May rose by 2.5 million and the unemployment rate declined to 13.3%. The private services sector recovered 2.425 million payrolls in May after shedding 17.351 million in April. The BLS credits the improvements in the labor market as a reflection of a limited resumption of economic activity which had been curtailed in March and April due to the COVID-19 pandemic and the efforts to contain it. In May, employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade. By contrast, employment in government continued to decline sharply. Specific to construction: construction employment increased by 464,000 in May, gaining back almost half of April’s decline (-995,000). Much of the gain occurred in specialty trade contractors (+325,000), with growth about equally split between the residential and nonresidential components. Job gains also occurred in construction of buildings (+105,000), largely in residential building.