Payroll employment rises by 559,000 in May; unemployment rate declines to 5.8%

Staff Reports

Total nonfarm payroll employment rose by 559,000 in May, and the unemployment rate declined by 0.3 percentage point to 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, in public and private education, and in health care and social assistance.

This news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry. For more information about the concepts and statistical methodology used in these two surveys, see the Technical Note.

Household Survey Data

In May, the unemployment rate declined by 0.3 percentage points to 5.8 percent, and the number of unemployed persons fell by 496,000 to 9.3 million. These measures are down considerably from their recent highs in April 2020 but remain well above their levels prior to the coronavirus (COVID-19) pandemic (3.5 percent and 5.7 million, respectively, in February 2020). 

Among the major worker groups, the unemployment rates declined in May for teenagers (9.6 percent), Whites (5.1 percent), and Hispanics (7.3 percent). The jobless rates for adult men (5.9 percent), adult women (5.4 percent), Blacks (9.1 percent), and Asians (5.5 percent) showed little change in May. 

Among the unemployed, the number of persons on temporary layoff declined by 291,000 to 1.8 million in May. This measure is down considerably from the recent high of 18.0 million in April 2020 but is 1.1 million higher than in February 2020. The number of permanent job losers decreased by 295,000 to 3.2 million in May but is 1.9 million higher than in February 2020. 

In May, the number of persons jobless less than 5 weeks declined by 391,000 to 2.0 million. The number of long-term unemployed (those jobless for 27 weeks or more) declined by 431,000 to 3.8 million in May but is 2.6 million higher than in February 2020. These long-term unemployed accounted for 40.9 percent of the total unemployed in May.

The labor force participation rate was little changed at 61.6 percent in May and has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The participation rate is 1.7 percentage points lower than in February 2020. The employment-population ratio, at 58.0 percent, was also little changed in May but is up by 0.6 percentage point since December 2020. However, this measure is 3.1 percentage points below its February 2020 level.

The number of persons employed part-time for economic reasons was essentially unchanged at 5.3 million in May but is 873,000 higher than in February 2020. These individuals, who would have preferred full-time employment, were working part-time because their hours had been reduced or they were unable to find full-time jobs. 

In May, the number of persons not in the labor force who currently want a job was essentially unchanged over the month at 6.6 million but is up by 1.6 million since February 2020. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.

Among those not in the labor force who currently want a job, the number of persons marginally attached to the labor force, at 2.0 million, changed little in May but is up by 518,000 since February 2020. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 600,000 in May, little changed from the previous month but 199,000 higher than in February 2020. 

Household Survey Supplemental Data

In May, 16.6 percent of employed persons teleworked because of the coronavirus pandemic, down from 18.3 percent in the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.

In May, 7.9 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic–that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is down from 9.4 million in the previous month. Among those who reported in May that they were unable to work because of pandemic-related closures or lost business, 9.3 percent received at least some pay from their employer for the hours not worked, unchanged from the previous month.

Among those not in the labor force in May, 2.5 million persons were prevented from looking for work due to the pandemic. This measure is down from 2.8 million the month before. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.)

These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Establishment Survey Data

Total nonfarm payroll employment increased by 559,000 in May, following increases of 278,000 in April and 785,000 in March. In May, nonfarm payroll employment is down by 7.6 million, or 5.0 percent, from its pre-pandemic level in February 2020. Notable job gains occurred in leisure and hospitality, in public and private education, and in health care and social assistance in May. 

In May, employment in leisure and hospitality increased by 292,000, as pandemic-related restrictions continued to ease in some parts of the country. Nearly two-thirds of the increase was in food services and drinking places (+186,000). Employment also rose in amusements, gambling, and recreation (+58,000) and in accommodation (+35,000). Employment in leisure and hospitality is down by 2.5 million, or 15.0 percent, from its level in February 2020.

In May, employment increased in public and private education, reflecting the continued resumption of in-person learning and other school-related activities in some parts of the country. Employment rose by 53,000 in local government education, by 50,000 in state government education, and by 41,000 in private education. However, employment is down from February 2020 levels in local government education (-556,000), state government education (-244,000), and private education (-293,000).

Health care and social assistance added 46,000 jobs in May. Employment in health care continued to trend up (+23,000), reflecting a gain in ambulatory health care services (+22,000). Social assistance added 23,000 jobs over the month, largely in child daycare services (+18,000). Compared with February 2020, employment is down by 508,000 in health care and by 257,000 in social assistance.

Employment in information rose by 29,000 over the month but is down by 193,000 since February 2020. In May, job gains occurred in the motion picture and sound recording industries (+14,000).

Manufacturing employment rose by 23,000 in May. A job gain in motor vehicles and parts (+25,000) followed a loss in April (-38,000). Employment in manufacturing is down by 509,000 from its level in February 2020.

Transportation and warehousing added 23,000 jobs in May. Employment increased in support activities for transportation (+10,000) and in air transportation (+9,000). Since February 2020, employment in transportation and warehousing is down by 100,000.

Employment in wholesale trade increased by 20,000 in May, mostly in the durable goods component (+14,000). Employment in wholesale trade is down by 211,000 since February 2020.

Construction employment edged down in May (-20,000), reflecting a job loss in nonresidential specialty trade contractors (-17,000). Employment in construction is 225,000 lower than in February 2020.

Employment in professional and business services changed little in May (+35,000). Within the industry, employment continued to trend up in accounting and bookkeeping services (+14,000). Employment in temporary help services changed little over the month (+4,000), following a large decline in April (-116,000). Overall, employment in professional and business services is down by 708,000 since February 2020.

Employment in retail trade changed little in May (-6,000). Clothing and clothing accessories stores added 11,000 jobs. Employment in food and beverage stores decreased by 26,000, following a decline of 47,000 in April. Employment in retail trade is 411,000 below its February 2020 level.

In May, employment changed little in other major industries, including mining, financial activities, and other services.

Average hourly earnings for all employees on private nonfarm payrolls increased by 15 cents to $30.33 in May, following an increase of 21 cents in April. Average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.60 in May, following an increase of 19 cents in April. The data for the last 2 months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.

In May, the average workweek for all employees on private nonfarm payrolls was 34.9 hours for the third month in a row. In manufacturing, the average workweek rose by 0.1 hour to 40.5 hours, and overtime increased by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.1 hour to 34.3 hours. 

The change in total nonfarm payroll employment for March was revised up by 15,000, from +770,000 to +785,000, and the change for April was revised up by 12,000, from +266,000 to +278,000. With these revisions, employment in March and April combined is 27,000 higher than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)