US unemployment falls to 13.3% in May, beating expectations

The world’s largest economy has been the hardest hit from the pandemic

A man looks at signs of a closed store due to Covid-19 in Illinois. US businesses shed 2.76 million jobs in May, as the economic damage from the historically unrivalled coronavirus outbreak stretched Show more

The US unemployment rate declined to 13.3 per cent in May as total non-farm payrolls rose 2.5 million, beating analyst expectations, according to the country’s Bureau of Labour Statistics.

Non-farm payroll refers to employment in the goods, construction and manufacturing sectors and excludes agricultural, private household, government or non-profit employees.

"These improvements in the labour 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,” the bureau said in a statement.

"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,” it added.

The coronavirus pandemic has hit the global economy, which is set to slide into a deep recession this year. It has forced governments to close borders, enforce movement restrictions and shut all but essential businesses. The US, the world’s largest economy, has the highest infection rate and death toll globally. Total number of confirmed cases was above 1.8 million in the US, which has registered 108,211 deaths from the coronavirus outbreak. More than 21 million jobs were lost in March and April as the pandemic closed many small and medium sized businesses and companies furloughed staff to stay afloat.

"The US unemployment rate has shocked everyone because the number was much lower than the market expectation. Speculators were whispering for 20 per cent. This a mind-blowing number and shows that the economy is improving,” said Naeem Aslam, chief market analyst at Ava Trade

"Things are not as bad as many thought. This data, if it is a true reflection of the economy, is likely to speed up the recovery for the US economy,” he added.