May 2020 Employment Report by Bruce Steinberg


Last month (see the discussion here), we discussed workers on self-reported temporary layoffs questioning if “these workers [are] really only on temporary layoffs? Obviously, returning to work is contingent on a business to return to — and many businesses may not survive and reopen. Are workers accurately reporting their job prospects or is it wishful thinking that they will be recalled from layoffs? Also, are employers are not being frank by dangling the prospect that furloughed workers will be the first to be rehired … It is likely that many of the jobs lost will not be coming back quickly, or even not at all.”

The Federal Reserve’s Beige Book, which came out last week covering the period from early April to mid-May (our summation of it highlighting comments relevant to staffing, IT, and sectors relevant to them is here) seems to bear that supposition out. In addition, the employers who are trying to call back workers are finding them not willing to come back in some cases because the extra $600 weekly supplement to regular unemployment benefits is making it financially beneficial not to return to work, e.g.: “…  overcoming the lure of expanded unemployment benefits.” That weekly supplement expires on July 31. We think it’s important to be reminded that unemployment benefits not only provide assistance to workers and their families, but enable those who are out of work to continue to be actively spending consumers, which is the basis for the economy. Keep in mind that consumer spending is responsible for about 70 percent of GDP so regardless of political leanings, the money being distributed to the unemployed regardless fairly or not, may be assisting to save the economy from a black hole implosion.

If you have not yet read the May edition of the Beige Book, we highly suggest you review it. To lure back workers, some employers are “… temporarily increasing wages to retain essential on-site staff, to match the amount employees could earn on unemployment, or to reduce absenteeism.” Although bringing staffing levels back can be a boon to staffing companies, we warn for a possible PR nightmare as one staffing contact told fed researchers, “Overall, contacts expressed optimism, ‘excited’ (as one put it) to facilitate hiring during the upcoming recovery.” IMHO, nothing wrong with staffing executives being optimistic about increased activity, but being “excited” may be going a bit too far.

Initial filings for unemployment benefits …

For those who do not follow our Twitter feed, the latest number — it was released yesterday and is on a one-week delay — is down more than 300,000 from the previous week. But it is still scary high for those filing for unemployment benefits for the first time for the week ending May 30, 2020.

However, although this metric continues to slow, at more than 1,600,000 people filing for unemployment for the first time, this metric is still no where near the pre-pandemic level of around 222,000 per week, which is the average from January 2018 to mid-March 2020. 

Temporary layoffs compared to permanent job losers …
Since we started off discussing this subject and in detail from last month, we thought it insightful  to update this information .

As you can see, more people considered themselves as having permanently lost their jobs in May and fewer considered themselves on only a temporary layoff.

Specifically, 2,720,000 fewer considered themselves on temporary layoffs in May from the previous month, probably because they got called back to work. But, 1,016,000 more consider themselves having permanently lost their job in May than in February, before furloughs began due to the pandemic.


May 2020 Employment Report 

Quick Recap

The employment situation for May comes as quite a surprise. The unemployment rate declined as the number of unemployed persons decreased as other measurements of employment improved, which was unexpected. The May Surprise is a surprise because of the still very high numbers of people filing for unemployment benefits for the first time … see the Household Survey section below for many more details and explanations.

After the number of jobs only fell off the cliff in April with a decline of 20,687,000, the economy added 2,509,000 nonfarm jobs — private sector jobs improved even more — in May. But to quote ourselves from last month’s report, “with many states reopening prior to the survey week, these jobs figures will improve when the May 2020 data are released next month as more people will be getting paychecks during the reference week.”

Average hourly wages, which took a bump up in April likely due to the heavier loss of lower- paying jobs and temporary “hazard” pay raises, were down in May by almost 30 cents, or almost one percent.

And Temporary help services, which fell off the Mount Everest and lost market share with its worse performance since in at least three decades when tracking through a unique statistical code began, in April experienced growth in May, contrary to other independent surveys and anecdotal reports.

Jobs Report

The economy added 3,094,000 private-sector jobs in May after being down 19,724,000 in April.

The private Goods-producing sector was up 669,000 jobs in May after dropping 2,373,000 in April.


  • Manufacturing was up 225,000 in May after losing 1,324,000 in April.
  • The Construction sector nailed together 464,000 more jobs in May than in April when it lost 995,000 jobs.


  • But Mining and logging dug itself farther down into a hole with a loss of 20,000 in May after burying (losing) 54,000 in April.

The private Service-providing sector added 2,425,000 jobs in May after taking a tremendous hit in April when it shed 17,351,000 jobs.

  • The Retail trade sector welcomed 367,800 jobs back after declining by 2,285,800 in April.
  • The Wholesale trade sector performed likewise with 21,400 more jobs in May than in April when it decreased by 382,500 jobs.
  • However, Transportation and warehousing continue to ship out jobs with a decline of 19,000 in May after declining by 553,300 in April.
  • Financial activities was on the plus side with the addition of 33,000 jobs in May after subtracting 264,000 in April.
  • The Professional and business services sector increased by 127,000 in May after dropping by 2,189,000 jobs in April.  However, declines at Computer systems design and related services continue with a loss of 12,700 jobs in May on top of the 79,000 it lost in April. But, Management and technical consulting services added 7,000 in May after declining 79,800 in April. And Architectural and engineering services also gained in May with an increase of 6,900 jobs after declining 77,600 in April.
  • The Education and health services sector was up 424,000 in May after being down by 2,590,000 in April. Although many health care and social assistance sub-sectors saw job increases, hiring in home health care services continued on a downward trend, but improved with a loss of only 3,000 jobs in May after declining by crippling 110,000 in April.
  • As expected, the Leisure and hospitality sector ordered 1,239,000 more jobs in May, but still has a long was to go before recouping the 7,539,000 jobs it cancelled in April.

The total number of Government jobs was down 585,000 in May that followed a decline of 963,000 in April. The federal government was down 14,000 in May, state government down 84,000 although three-quarters of that decline was at state government education, and local government declined by 487,000 in May after declining by 797,000 in April, although a large portion of those declines were in local education.

Temporary Help Services Roundup

As mentioned earlier, Temporary Help Services surprised with an increase of 39,100 in May to 2,087,000 after declining by 840,500 in April. That calculates to 1.91 percent sequential growth in May, which was almost even with the 1.92 sequential growth with total nonfarm jobs. However, the year-over-year decline of 29.2 percent for temporary help services was considerably steeper than the 11.7 percent decline in total nonfarm jobs.

For a chart of temporary help’s growth from January 1991 to May 2020 and comparing its trend to total employment, click here. (if charts are unclear, click on it to open in a browser window)




In May 2020, temporary help services market share was only incrementally down at 1.5702 percentage in May from April’s 1.504 percentage. However, a year ago in May 2019 it was 1.9573 percent.



  Household Survey

 The unemployment rate improved to 13.3 percent in May after it fell like a rock 14.7 in April from 4.4 percent in March.

The employment situation for the country’s households improved in May. The number of employed persons increased 1,746,000 in May after declining 22,369,000 in April as the number of unemployed persons declined 2,093,000 in May after increasing 15,938,000 in April. The size of the entire labor force expanded 1,746,000 in May after contracting 6,432,000 in April. And there was 1,595,000 fewer people considered as not in the labor force in May that followed 6,570,000 more in April.

The labor force participation rate was improved 0.6 to 60.8 percent in May from April and the employment-to-population ratio was up 1.5 to 52.8 percent; in “normal” this data rarely changes more than 0.1 on a month-over-month basis.

The number of discouraged workers increased considerably from a year ago to 598,000 in May 2020 from 338,000 in May 2019, but this is not unexpected.

BTW, we maintain an updated table of many major employment as well as other general economic indicators here or here for the mobile here or here for the mobile version.