The worldwide lockdown amid Covid-19 pandemic was led the financial analysts to conclude about a high rate of unemployment. The increased rate attributed to the closing of many hospitality and the related industry as well as a complete shut down of local business. To the surprise of analysts and wall street, the monthly U.S jobs report published by Bureau of Labor Statistics (BLS) reveals a sharp decrease in the unemployment rate that goes entirely against numerous forecasts published by renowned financial firms about impending spike in the unemployment rate.
Massive number of Employees back to Work
There are more than 2.5 million workers are added this month by the employers on the contrast of economists projection of a loss of 7.5 million jobs. Most of the forecast and prediction, including the World Economic Forum, has entirely missed these changes.
The economist’s forecast was mainly based on the unemployment benefits applications received by the government. Considering an enormous number of the application filed within a short span of time, there was an unemployment rate of 20% expected during the month of May. However, as per May’s job report, the rate was declined by a significant 13.3%.
Considering the overwhelming number of workers added back to the system, Moody’s Analytics chief economist concludes that the forecasted recession is over now. Furthermore, this report also forced to revise the previous forecasts made about the whooping unemployment rate and another setback for economies.
Out of 2.5 million jobs, most of the employees were not laid off entirely, but they were on temporary unpaid leave due to coronavirus related economic shutdown.
Although it came as a surprise to most of the economists, the result is pretty optimistic. The current projection may see more positive changes once the government lifts the prevalent lockdown gradually.