We were more surprised when we read the May Jobs Report than when we heard Tom Brady was leaving the Patriots. Economists surveyed by Dow Jones had been expecting payrolls to drop by 8.33 million and the unemployment rate to rise to 19.5%.
Instead, the US regained 2.5 million jobs in May and the unemployment rate fell to 13.3%.
It was the largest monthly gain in new jobs since the Bureau of Labor Statistics started tracking the data in 1939.
How could the experts have been so wrong? Well, the economy was intentionally shut down to curb the spread of the coronavirus. This has never been done before, so it was difficult for economists to predict how the labor market would behave.
“There is no underselling it, this was a huge surprise,” said Daniel Zhao, senior economist at Glassdoor.
The jobs report lifted hopes that the economy has moved beyond the worst fallout from the pandemic and may recover more quickly than expected.
“This is definitely in the right direction and suggests the US economy may be faring better than some of those worst-case scenarios,” said economist Lindsey M. Piegza of financial firm Stifel Nicolaus & Co. “But it remains to be seen if this is indicative of an ongoing positive trend or if this reflects the bare minimum of the labor force needed to reopen the economy.”
2020 sure has a thing for surprises.