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U.S. labor market unexpectedly improves; recovery years away

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A man speaks with a library worker after receiving an unemployment form, as the outbreak of coronavirus disease (COVID-19) continues, in Miami Beach

The U.S. economy unexpectedly added jobs in May after suffering record losses in the prior month, offering the clearest signal yet that the downturn triggered by the COVID-19 pandemic was probably over, though the road to recovery could be long.

The Labor Department’s closely watched employment report on Friday also showed the jobless rate falling to 13.3% last month from 14.7% in April, a post World War Two high. It followed on the heels of surveys showing consumer confidence, manufacturing and services industries stabilizing. Businesses have reopened after shuttering in mid-March to slow the spread of COVID-19.

“The country has turned the corner from the pandemic and the recession it created for now, but all the workers who lost their paychecks will find it difficult to regain their place in society as many of these jobs are gone forever,” said Chris Rupkey, chief economist at MUFG in New York.

“It took years for the economy to grow enough to find jobs for those unemployed in the last recession, and it will take years again this time to do the same.”

The survey of establishments showed nonfarm payrolls rose by 2.509 million jobs last month after a record plunge of 20.7 million in April. Economists polled by Reuters had forecast payrolls falling by 8 million jobs. They had expected the survey of households to show the unemployment rate jumping to 19.8%.

President Donald Trump, who had a turbulent week amid nationwide protests over police brutality and racial inequality, quickly took credit for the surprise labor market turnaround.

“Really Big Jobs Report. Great going President Trump (kidding but true)!” Trump wrote on Twitter.

But the improvement was uneven. The unemployment rate for blacks increased one-tenth of a percentage point to 16.8%. In contrast, the jobless rate for whites fell to 12.4% from 14.2% in April. Economists believe the unemployment rate peaked in May, but see it remaining above 10% when Americans head to the polls on Nov. 3.

Stocks on Wall Street rallied on the report. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

After working 4 years as a reputed journalist, Jerome wanted to explore internet-based journalism. He brought together the idea of USA Reformer to dispatch news that serves the need of readers with perfect information. He also contributes as a business news writer for the website.

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