Jobless rate falls in sign of recovery

But much of May’s growth was driven by part-time jobs, and unemployment actually rose among blacks.

The federal

WASHINGTON — unemployment rate declined to 13.3% in May from 14.7% in April, the Department of Labor said Friday, a surprising turnaround after months of job losses that was hailed as a sign that economy is recovering more quickly than projected.

The economy gained 2.5 million jobs in May, as many states and counties began to reopen with the slowing of coronavi

rus cases nationwide.

Yet the 30 million workers who are still collecting unemployment benefits show how significantly the labor market

has been upended. The unemployment rate remains the worst since World War II.

“The idea you would see job gains and the unemployment rate falling was not something really that people were expect

ing,” said Jay Shambaugh, an economist at the Brookings Institution. “But a 13.3% unemployment rate is higher than any point in the Great Recession. It represents massive joblessness and economic pain. You need a lot of months of gains around

this level to get back to the kind of jobs totals we used to have.”

President Donald Trump hailed the report Friday, proclaiming it as a sign of a rapid rebound, even as economists warned that full recovery in the labor market could still be years away.

“It was incredible in a couple of ways,” Trump said from the Rose Garden. “We’ll go back to having the greatest economy anywhere in the world.”

Former Vice President Joe Biden criticized Trump’s stewardship of the economy, arguing that even as the report showed moderate and unexpected gains, Trump should be held to account for deepening the nation’s staggering and unequal economic pain.

“It’s time for him to step out of his own bunker,” Biden said of the president. The presumptive Democratic presidential nominee suggested Trump was prematurely seeking to declare, “Mission Accomplished.”

“A president who takes no responsibility for costing millions and millions of Americans their jobs deserves no credit when a fraction of them return,” Biden said.

On Wall Street, the Dow Jones Industrial Average gained nearly 830 points, or more than 3%, and the broader S&P 500 closed 2.6% higher on the news. The S&P is now just 5.7% below its pre-pandemic peak, after plummeting 34%.

Some of the sectors that have been hardest hit by the crisis saw the biggest gains in May.

The upswing in restaurants, bars and other food service employment accounted for about half the gains, after steep declines the previous two months. Employment in leisure and hospitality increased by 1.2 million. Construction employment increased by 464,000. And the health care industry also recovered 312,000 jobs between April and May.

Kate Bahn, an economist at the Washington Center for Equitable Growth, said the numbers were a sign the recession would not be as severe as some forecasts had projected, but cautioned against assuming the economy had turned the corner.

“Even if it is unexpected, we still have really high unemployment rate,” she said. “We’re certainly not in a recovery yet.”

Even while the impact to businesses most effected by the coronavirus begins to lessen, other economic pain has begun to filter through other sectors of the economy, Bahn said.

“We’re starting to see the spillover effects of the recession: broader, more evenly distributed impacts,” she said.

A substantial portion of the growth in May — about two-fifths — was driven by part-time jobs, an indication of how fragile and uneven the recovery could be. Economists agree that getting back to normal will take longer and be more challenging than recessions of the past.

Of particular concern to economists as the country has seen an outburst of protests about racism, black Americans saw their unemployment rate, already higher than that of white people, increase. Whereas the unemployment rate for white people went down from 14.2 to 12.4%, the unemployment rate for blacks ticked up, from 16.7 to 16.8%.

Asian Americans saw their unemployment rate rise too, from 14.5 to 15%. Hispanic unemployment dropped from 18.9 to 17.6%.

“One thing we’ve talked about this week with police protests is that we’ve left African Americans behind in lot of things. The jobs day numbers reflect that,” said Olugbenga Ajilore, a senior economist at the left-leaning Center for American Progress. “Whenever we have a recovery — blacks are always left behind.”

The layoffs have led to long lines at food banks, with efforts complicated by lack of staff and supply shortages. And with expanded unemployment benefits set to expire July 31, unemployed workers could struggle even more to pay bills, triggering a wave of defaults on credit card balances, car payments and mortgages.

The unexpectedly optimistic jobs numbers are likely to slow the push on Capitol Hill for an additional round of stimulus spending. Congressional Republicans and the White House have expressed skepticism about the need to approve or extend emergency economic aid, saying policymakers should wait to evaluate the impact of easing public health restrictions on the economy.

Many economists and congressional Democrats have said additional government funding is urgently needed to avert an economic downturn, with trillions in new spending expected to expire in the coming months.

Labor Secretary Eugene Scalia said in a statement that the report signaled that “the worst of the coronavirus’s impact on the nation’s job markets is behind us.”

“Millions of Americans are still out of work, and the Department remains focused on bringing Americans safely back to work and helping States deliver unemployment benefits to those who need them,” he said.

There are more indications that the pain is not being shared equally in the United States.

Hispanic workers are nearly twice as likely as whites to have lost their jobs amid the coronavirus shutdowns, according to a Washington Post-Ipsos poll, underlining the pandemic’s disproportionate toll on some racial and ethnic groups. That poll found that 20% of Hispanic adults and 16% of blacks report being laid off or furloughed since the outbreak began in the United States, compared with 11% of whites and 12% of workers of other races.

Complicating the path to economic recovery is the unusual nature of this public health pandemic. Without a cure or vaccine, the virus could deliver more suffering and economic destruction, and public health officials have warned about another wave of infections later this year.

“We’re not in a normal recession situation where key priority is getting the unemployment rate down,” said Damon Jones, an economist at the University of Chicago. “We’re intentionally keeping the economy in a coma to try to treat it.”

‘Even if it is unexpected, we still have really high unemployment rate. We’re certainly not in a recovery yet.’ Kate Bahn

An economist at the Washington Center for Equitable Growth