The US Economy Grew by 2.5 Million Jobs in May
New figures released by the Department of Labor showed the US unemployment rate shrinking to 13.3% as states reopen, raising stocks globally.
The Department of Labor’s jobs report was released on Friday and, in a piece of unexpectedly positive news for the US economy, showed that 2.5 million American jobs were created in the month of May, reducing the nation’s unemployment rate to 13.3% – down from 14.7% in April.
The news came as a surprise to many economists, who had estimated an unemployment rate of 19-20% and 8 million lost jobs.
“To add more than two and a half million jobs is, quite frankly, a stunning result,” said Robert Alster, head of investment services at Close Brothers Asset Management. “These figures have quite simply caught everyone off guard.”
The figures’ release saw a positive effect on stocks worldwide. In Europe, the FTSE 100 roseby 1.8%, the DAX by 2.7%, and the CAC 40 by 3%.
American stocks naturally saw a boost of their own, with the S&P 500 rising by 2.34%, the DOW by 2.9% and NASDAQ by 1.4%.
The Department of Labor’s new figures seem to indicate that the US economy is bottoming out, though the recovery is likely to drag on for some time yet. Jay Shambaugh, an economist from the Brookings Institution, commented, “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.”