Economy: Employment Situation Report for May 2020

The Employment Situation Report for May 2020 was released by The Department of Labor's Bureau of Labor Statistics this morning:

Nonfarm Payrolls (month-to-month change)
Predicted: +2,000,000
Actual: +2,509,000

U-3 Unemployment Rate (Headline)
Actual: 13.3%
Previous Month: 14.7%
12 Months Previous: 3.6%

U-6 Unemployment Rate*
Actual: 21.2%
Previous Month: 22.8%
12 Months Previous: 7.2%

Average Hourly Earnings (month-to-month change)
Predicted: +0.9%
Actual: -0.965% (-$0.29)

Average Hourly Earnings (year-on-year change)
Predicted: +7.0%
Actual: +6.746% (+$1.88)

Average Weekly Earnings (month-to-month change)
Actual: +0.483% (+$4.96)

Average Weekly Earnings (year-on-year change)
Actual: +7.677% (+$73.60)

Civilian Labor Force Participation Rate: 60.8%
Previous Month: 60.2%
12 Months Previous: 62.9%

Average Workweek
Predicted: 34.3 hours
Actual: 34.7 hours

Economist, academics, central bankers and investors pay very close attention to the monthly Employment Situation report as it offers penetrating insight as to the current and near-future state of the overall U.S. economy. If a) Americans are earning more money and b) the economy is creating new jobs, this typically translates to more money being pumped into the economy (and vice versa.)

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

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From Today's Report:

"...In May, average hourly earnings for all employees on private nonfarm payrolls fell by 29 cents to $29.75 [-0.965%], following a gain of $1.35 in April. Average hourly earnings of private-sector production and nonsupervisory employees decreased by 14 cents to $25.00 [-0.557%] in May. The decreases in average hourly earnings largely reflect job gains among lower-paid workers; this change put downward pressure on the average hourly earnings estimates. (See tables B-3 and B-8.)..."

"...The change in total nonfarm payroll employment for March was revised down by 492,000, from -881,000 to -1.4 million, and the change for April was revised down by 150,000, from -20.5 million to -20.7 million. With these revisions, employment in March and April combined was 642,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. A methodological change to the establishment survey’s birth-death model contributed to the revision for March. For more information, see the box note on page 6.) After revisions, job losses have averaged 6.5 million per month over the past 3 months..."

"...These improvements in the labor market reflected 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. 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..."

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Chart: Nonfarm Payroll Employment
May 2020 Update

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Chart: U-3 (Headline) Unemployment Rate
May 2020 Update

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* = The U-6 Unemployment Rate is defined as:

"Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force."

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