Dows soars 800 points after surprise gain in jobs as virus eases
WASHINGTON, DC — Stocks closed out the week with a bang after a closely watched report on the job market surprised investors by showing that employers added to their payrolls last month, defying predictions they would slash more jobs.
The S&P 500 rose 2.6% Friday, its eighth gain in the last 10 trading days. The Dow soared nearly 830 points, or 3.2%, and the Nasdaq was up more than 2% to finish the day just below its record closing level from February 19.
Unemployment dipped to 13.3% as employers added 2.5 million jobs in May as the impact from the virus eases. Economists were expecting them to cut another 8 million.
To be sure the data could be an aberration, and the slog ahead is long, but the report lent credence to the optimism building that the economy can climb out of its coronavirus slump.
The unemployment rate dropping to 13.3% in May from 14.7% was a surprisingly positive reading in the midst of a recession that has paralyzed the economy in the wake of the viral pandemic.
The May job gain suggests that businesses have quickly been recalling workers as states have reopened their economies.
Other evidence has also shown that the job market meltdown triggered by the coronavirus has bottomed out. The number of people applying for unemployment benefits has declined for nine straight weeks. And the total number of people receiving such aid has essentially leveled off.
The overall job cuts have widened economic disparities that have disproportionately hurt minorities and lower-educated workers. Though the unemployment rate for white Americans was 12.4% May, it was 17.6% for Hispanics and 16.8% for African-Americans.
Even with the surprising gain in May, it may take months for all those who lost work in April and March to find jobs. Some economists forecast the rate could remain in double-digits through the November elections and into next year.
