In a strong signal that the economy may be rebounding from the COVID-19 pandemic, the U.S. unemployment rate posted a surprise decline from 14.7% in April to 13.3% in May as total payroll employment increased by 2.5 million.
Residential construction employment rose by 226,000 in May to 2.7 million, partially reversing a loss of 422,000 in April. Total construction industry (both residential and nonresidential) employment rebounded to 7 million in May.
Most economists were expecting an unemployment rate closer to 20%, given the large number of weekly unemployment insurance claims filed over the past month.
After widespread job losses in all the major sectors in April, many sectors posted employment gains in May. Employment in leisure and hospitality, construction, education and health services, and retail trade had the largest gains in May, while government employment continued to decline sharply.
NAHB Chief Economist Robert Dietz provides further analysis:
"The May report provided evidence of an economy on the rebound as the country reopens in phases.
"Housing and construction led the way, with home builders and remodelers adding 226,000 jobs in May. Clearly, hiring has restarted and construction activity conditions improve.
"NAHB's latest forecast revisions were positive changes and reflect what appears to be a shorter recessionary period. The recovery is still not expected to be quick, with an unemployment rate near 10% at the end of the year and the ongoing economic damage from the pandemic will take time to repair. Many uncertainties still remain, including the risk of a new surge in virus cases.
"But markets are showing resiliency and the data are good for housing."
NAHB economist Jing Fu provides more details on the May jobs report in this Eye on Housing blog post.