US unemployment rate unexpectedly falls to 13.3% in May – as it happened
The US unemployment rate unexpectedly fell to 13.3% in May, taking markets by surprise. Economists had been expecting unemployment to reach 19.8%
The GfK UK consumer confidence index fell to -36 in second half of May, marking its lowest level since the global financial crisis. It came amid worries over a surge in unemployment and tumbling house prices during the Covid-19 lockdown=
The Halifax house price index showed a further 0.2% month-on-month decline in May, as the lockdown took its toll on the housing market. The average price of a house in the UK was £237,808
That’s all from us today. Have a good weekend and stay safe –KM
US president Donald Trump is set to hold a press conference shortly, where he’s expected to celebrate the jobs figures.
You can follow that on our US live blog here:
US stocks have extended their gains, with the Dow now trading higher by 3%.
Global oil prices have climbed to three month highs above $40 a barrel on Friday, after reports emerged that members of the Opec oil cartel will agree to extend their historic oil production cuts.
Brent crude prices are trading near 3-month highs. Photograph: Tail1/Refinitiv
The world’s largest oil producers are expected to sign off the agreement this weekend to continue holding back 9.7 million barrels of oil a day through the summer to prevent a market collapse due to the coronavirus crisis.
The international oil price benchmark, Brent crude, climbed by $2.40, or 6%, to $42.39 a barrel on Friday afternoon. US oil prices rose $2.05, or almost 5.5%, to $39.46 a barrel.
The original deal has helped oil prices to climb well above the lows seen in April when Brent crude fell to 21 year lows of $16 a barrel, and US prices turned negative for the first time.
Brent crude oil prices were also given a slight, albeit temproary, boost from the US jobs report figures. Photograph: Tail1/Refinitiv
Saudi Arabia, the de facto leader of the Opec cartel, and Russia have reportedly agreed to extend the deal to at least the end of July while Riyadh continues to push for the cuts to remain in place through August.
The meeting is scheduled to take place via webinar on Saturday.
Bjornar Tonhaugen, the head of oil markets at Rystad Energy, said:
It now seems very likely that OPEC+ will meet tomorrow to hash out a deal to extend the current May-June deep cuts for one more month.
Wall Street was rip raring to go after the data release, and stocks are rallying at the start of trading.
NYSE 🏛 (@NYSE)
The Dow jumped over 700 points shortly after today’s open
European stocks have hit session highs on the back of the US jobs data:
European indices have rallied this afternoon. Photograph: Tail1/Refinitiv
An interesting point by the former economic adviser to Joe Biden, about the sheer scale of the recovery needed to bounce back from the massive job losses so far:
Jared Bernstein (@econjared)
Here’s a simple but important picture of what’s happening to jobs. Extremely welcome reversal, of course, if it sticks, but the magnitude of the losses means that even if this uptick pace continues, it would take almost a year just to make up lost ground. pic.twitter.com/kClNyb5kUz
Naeem Aslam, chief market analyst at AvaTrade, says the US unemployment rate “mind-blowing number”:
The US unemployment rate has shocked everyone because the number was much lower than the market expectation. Speculators were whispering for 20%.
This a mind-blowing number and shows that the economy is improving. Things are not as bad as many thought. This data, if it is a true reflection of the economy, is likely to speed up the recovery for the US economy.
Joe Weisenthal (@TheStalwart)
This line nails why the economic situation is still so confusing.
There’s a lockdown AND a recession.
Some people are unemployed due to lockdowns. Some people unemployed due to the recession caused by the lockdowns.
The former are coming back to work. The latter aren’t yet. t.co/H3ny9JqSjD
Covid-19’s devastating assault on the US economy waned in May as the unemployment rate dipped to 13.3% and the US added another 2.5m jobs.
The latest tally follows the loss of 20m jobs in April when unemployment hit 14.7%. In February the unemployment rate was just 3.5%.
A decade’s worth of gains made in the labor market since the last recession have been erased in just three months.
All 50 states have now begun easing quarantine restrictions and the pace of this unprecedented hollowing has now slowed as some have returned to work but uncertainties remain.
Weekly unemployment claims have plummeted from a frightening peak of 6.6m in April to 1.9m last week but Jason Reed, a professor of finance at the University of Notre Dame’s Mendoza College of Business, said the numbers were still huge. He worried America is now witnessing a shift from temporary to permanent layoffs.
With the pandemic still spreading, the true scale of Covid-19’s impact on the US economy is yet to be determined. The headline figures do not show the loss of hours and income millions of people are experiencing or count many people who have been sidelined by the shutdown but have not yet claimed benefits.
You can read the full report here:
The surprise print on unemployment has been a massive boost for US futures with the Dow now up 2.3%.
Pantheon Macroeconomics’ chief economist reckons that the surprise surge could be due to how easy it was to rehire staff that were originally let go at the start of the pandemic:
Ian Shepherdson (@IanShepherdson)
Hidden rehiring. No posting on Indeed, just a phone call/text/email and back you go. Or, the numbers could be utter garbage.
It comes as US non-farm payrolls showed the economy actually grew by 2.5 million jobs.
That compared to expectations for a loss of 8 million, according to a Reuter poll.
BREAKING: The US unemployment rate has unexpectedly fallen to 13.3% in May.
That is down from 14.7% in April.
Economists had been expecting unemployment to reach 19.8%, according to a Reuters poll.
Rail unions have threatened to strike over government plans for an “army” of volunteers at transport hubs to remind travellers to wear a face covering, my colleagues Helen Pidd and Gwyn Topham write.
The transport secretary, Grant Shapps, announced the policy of using volunteers without consultation according to the RMT union, which condemned moves to put unpaid workers in “safety critical roles”.
Face coverings will be mandatory on public transport in England from 15 June to help stop the transmission of coronavirus as more people go back to work, the government announced on Thursday.
Speaking on Radio 4’s Today programme on Friday, Shapps said passengers would also be encouraged to cover their face when entering bus and train stations with the help of volunteer “journey makers”.
The RMT general secretary, Mick Cash, said the Department for Transport had “done a backroom deal to recruit unpaid and unskilled workers on our railway without even so much as conversation with rail unions” and the union would consider a strike ballot.
