Canada's unemployment rate reaches record 13.7%

Unemployment rate falls to 13.3% in May

US economy adds 2.5 million jobs in May, unemployment falls to 13.3%

The U.S. unemployment rate contracted 1.4 percentage points in May to 13.3% - far exceeding economist forecasts of 19.8% and outperforming the 1933 peak that many expected to be comparable.

This is the highest the jobless rate has been since 1982.

The development indicates that the Coronavirus-paralysed U.S. economy is rebounding with surprising strength as businesses began to reopen last month after several weeks of lockdown over the pandemic.

Chris Rupkey, chief economist at Mitsubishi Financial Group, had a particularly pessimistic take on the road ahead, saying that "all the workers who lost their paychecks will find it hard to regain their place in society as many of these jobs are gone forever".

A separate report showing state data on weekly initial claims for unemployment benefits show over 42 million people have lost their jobs, at least temporarily, since mid-March when the shutdowns to contain the spread of COVID-19 began. While payrolls are picking up again, the recovery may be a slog until jobs lost are restored, and many economists believe that millions of jobs may not return at all.

In March, President Trump and Congress approved a massive stimulus package created to provide financial relief during the pandemic. The numbers will be a relief to policy makers after the unprecedented loss of about 3 million jobs in March and April. In the second week of April, New York state saw a 10,210 percent increase in unemployment filings among Asians from the year prior. But many economists had also predicted a 20 percent unemployment rate for May. But the government made the same mistakes in April, and together the figures still show the job market is improving. As of late May, all USA states had been in some phase of reopening.

Restaurants and bars added almost 1.4 million jobs in May when they reopened across the country, according to the Bureau of Labor Statistics.

People wait in line for help with unemployment benefits in Las Vegas on March 17
People wait in line for help with unemployment benefits in Las Vegas on March 17

She has also noticed an increase in hiring by the U.S. Small Business Administration to deal with the many companies applying for SBA-backed loans through the Paycheck Protection Program and Economic Injury Disaster Loans.

It's not just the job totals that matter - it's where the gains came from.

"What's great about that is there's probably a round two as retail and restaurants reopen, so we've got some more turns at the crank where we can get some more people back employed". That category includes all food delivery workers who are classified as employees, but does not count contractors, such as Postmates and Uber Eats part-time or some Amazon drivers. And job losses continued in the air transport, transportation and warehousing, mining and logging, and information sectors.

While around half of the jobs were secured in leisure and hospitality, employment was also up in construction, education, and health services.

"If this sticks, and my guess is it will, we're seeing a faster reopening than most expected, and a quicker unleashing of pent-up demand", economist Jared Bernstein of the Center on Budget and Policy Priorities said on Twitter.

The unemployment rate is still at its highest level since the 1930s era of bread lines and soup kitchens.

The positive signs of growth show some sectors may already be recovering from coronavirus shutdowns that dragged the US economy beginning in the second half of March.

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