May's jobless numbers point to an improving economy.
In April, economists got a bit of a shock when they saw the U.S. unemployment rate rise a bit compared to March. But in May, that pattern thankfully reversed.
The U.S. Bureau of Labor Statistics just released its May jobs report, and it shows that the economy is on the way to recovering from the impact of the coronavirus pandemic.
Unemployment rate drops as more jobs are added
In May, the U.S. unemployment rate fell to 5.8%, an improvement over April's 6.1% jobless rate. That 5.8% represents the lowest unemployment rate since March of 2020, when the jobless rate sat at 4.4% before the impact of the pandemic began to set in.
The economy also added 559,000 jobs in May, which was a large improvement over the 278,000 jobs that were added in April. That said, economists were estimating an addition of 650,000 new jobs last month. So while 559,000 is a decent number, it's also a bit of a disappointment.
It's also worth noting that the U.S. is still down 7.6 million jobs compared to the number that were available in February of 2020. That means there's clearly still more progress to be made despite May's numbers showing that the economy is headed in the right direction.
A tricky situation
One issue that's complicating a complete economic recovery is that many people who are out of work can't simply pick up and re-enter the workforce. For one thing, schools aren't fully back to in-person learning, and for lower-income workers, the cost of full-time childcare could effectively wipe out a paycheck.
There are also health-related constraints that some workers may be grappling with. Now that mask mandates are being lifted across the country, working in an indoor environment may not be safe for those who have yet to receive a coronavirus vaccine. And while vaccine supply is ample, health issues may be keeping some people from getting a vaccine.
There's also a portion of the population with immune system issues. For them, the vaccine may not provide the same amount of protection the typical recipient gets. As such, health concerns could be keeping some people out of the labor force.
Of course, there's also the theory that some unemployed workers aren't taking jobs because they're earning more money on unemployment. A $300 weekly boost is being made available to them as part of the American Rescue Plan, the massive $1.9 trillion relief package that also put stimulus checks into Americans' bank accounts.
This theory is the main reason why 25 states are pulling boosted unemployment early rather than waiting for that benefit to expire at the beginning of September.
We're not there yet
All told, May's jobs numbers do paint a more positive picture of the economy. But is it fair to say that we've reached the point of recovery? Absolutely not.
We may be inching closer, and that's a good thing. But until more jobs open up and the aforementioned barriers to re-entering the workforce are lifted, unemployment numbers are apt to remain higher than they were before the pandemic began.
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