America’s unemployment rate falls to 13.3% as economy posts surprise job gains

The American economy just got a shocking piece of good news: The job market may be recovering well ahead of schedule.

The US unemployment rate surprisingly fell to 13.3% in May, as the economy gained 2.5 million jobs.

It was the largest monthly gain in new jobs since the Bureau of Labor Statistics started tracking the data series in 1939.

The labor market rebounded from April’s drastic losses, when a revised 20.7 million jobs vanished. The unemployment rate last month soared to 14.7% as businesses shut during the coronavirus lockdown.

The Labor Department noted that during the pandemic, millions of workers were misclassified as “employed but not at work,” when they should have been counted as “unemployed on temporary layoff.” If it weren’t for those misclassifications, the unemployment rate would have been higher — around 19.2% in April and 16.1% in May, not including seasonal adjustments.

Still, economists’ estimates for the May report were way off, with expectations around 20% and about 8 million jobs lost. But the gradual reopening of the economy actually added new jobs rather than eliminating further positions.

Construction jobs, for example, increased by 464,000 in May, gaining back nearly half of what they lost in April. Construction activity is part of the first phase of reopening.

“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 pandemic and efforts to contain it,” said William W. Beach, commissioner of the Bureau of Labor Statistics, in a statement.

President Donald Trump took credit for the better than expected report on Twitter, calling the numbers “incredible.”

Trump said he would hold a news conference on the jobs report at 10 am ET.

This is a developing story. It will be updated