Increase in U.S. job hiring still shows high unemployment rate

In May, employers in 46 states added jobs following a promising addition of 2.5 million jobs in April nationwide, according to the AP. The surprisingly gain gave hope that the job market bottomed out in April, however recent numbers show that a large quantity of people continue to apply for unemployment aid.

The number of those still applying for aid suggest that many businesses across the country are continuing to remove positions from their companies, according to the AP.

Last month unemployment rates fell in 38 states, rose in three and were stable in nine, according to a news release from the U.S. Bureau of Labor Statistics on Friday. The national unemployment rate declined by 1.4 percentage points over the month to 13.3 percent but was 9.7 points higher than in May 2019, the release said.

The disparities ranged from Nevada, with the highest rate (25.3%), Hawaii (22.6%) and Michigan (21.2%) to Nebraska (5.2%, the lowest) and Utah (8.5%). The overall U.S. unemployment rate in May was a still-high 13.3%, a decline from 14.7% in April, according to the AP.

Data collected shows the unusually broad nature of the recession, the AP said, with all states enduring unemployment rates that soared in April as COVID-19 forced business closures and then generally fell in May but remained very high. In contrast, the AP continued, during the 2008-2009 Great Recession some Midwestern states like Iowa and North Dakota managed to avoid high unemployment. Yet this time in May, Iowa’s unemployment rate was a high 10% and North Dakota’s 9.1%.

There are some disparities among states that have been heavily impacted by the results of the pandemic-related closures. Nevada’s tourism industry has been hit hard and Michigan has seen many auto jobs cut, according to the AP. The gap between the highest and lowest states is slightly worse than during the 2008-2009 downturn.

Adam Kamins, senior regional economist at Moody’s Analytics, said that the broad-based job gains in May indicate that the government’s small business lending efforts, through the Paycheck Protection Program, helped spur more hiring, according to reporting from the AP.

State-level data shows that both early-opening states and those that remained closed longer managed to post solid job gains and lower unemployment rates in May, Kamins said. Georgia, Mississippi and Texas, which reopened faster than other states, enjoyed solid hiring gains.