Economists were bracing for another terrible monthly jobs report when the latest figures were released on Friday. The May jobs report was expected to demonstrate another month of staggering unemployment. Instead, the report was contradictory to nearly all forecasts, showing a record-setting month for job growth.

Inside the Numbers

Heading into the release of the report, analysts were predicting that unemployment would near a rate of 20% with an additional loss of approximately eight million jobs. These figures would have marked unemployment rates that rivaled those of the Great Depression. Despite the dire predictions, the report delivered a host of good news to weary Americans. Employers added 2.5 million jobs to the economy, causing the unemployment rate to settle at 13.3%. The robust addition of jobs marks the highest rate of growth since the Bureau of Labor Statistics began to track this information in 1939.

Affect on the Markets

As a result of the promising jobs report news, the stock market had a banner day. The Dow closed the day up 829 points at 27,110 while the Nasdaq was up over 2%. The S&P 500 closed at 3,193, a gain of 2.62% for the day. It is no surprise that the markets acted so favorably to the news. While unemployment levels are still at dire levels, the promising upswing indicates that the economy may recover more quickly than originally anticipated. It has been challenging for economists to predict what would happen since this is unchartered territory for everyone. Many are crediting the funds created with the government's Payroll Protection Plan for keeping small businesses afloat through the massive closures.

Demographics of Jobs Report

Whites and Hispanic experienced the biggest gains in employment. The May unemployment rate for whites was 12.4%, down from April's high of 14.2%. Hispanics saw a May unemployment figure of 17.6%, down from 18.9% in April. Although employment increased across all demographics, not all of the news was good. Black Americans saw decidedly less robust gains with unemployment rates basically holding steady at 16.8%. During the month of April, the unemployment rates across all demographic groups began to narrow as people from all crosssections were affected by the economic slowdown. However, that gap is beginning to widen once again as businesses begin to rehire in certain industries. The disparity of the jobs report data will only serve to intensify the growing racial tensions in the country as a result of the tragic death of George Floyd in Minneapolis.

Across gender lines, women continue to be affected at greater rates than men. Adult women saw a jobless rate of 13.9% in May, down from the reported 15.5% in April. Conversely, the overall unemployment rate for men across all racial backgrounds was at 11.6% in May, down from April's 13%.

What Businesses Are Hiring Again?

So where are all of the new jobs? Not surprisingly, the data showed that restaurants and bars led the way in job creation in May. This industry contributed to 1.37 million new jobs. This staggering figure accounts for roughly half of the total jobs added. The healthcare industry is also seeing a significant increase in new jobs with 312,000 new positions added back in May. This figure is not surprising when taking into account the massive losses in this industry in April. The majority of these new jobs came in the dental industry as these practices were allowed to open up again last month. On the heels of a loss of 2.6 million jobs in April, the retail industry bounced back, adding 368,000 jobs. Sectors that are still shedding jobs include the airline industry, government agencies, and local education.

Although this report gives hope that the bleeding may be starting to slow, only time will tell how severe the lasting effects of the COVID-19 crisis will be. With a current unemployment rate of 13.3%, this number is still at historic highs. There have been nearly 20 million jobs lost since February, meaning that the country is still in for a bumpy ride as the global economy starts the recovery process. However, the latest jobs news certainly gives the country a bit of optimism in these bleak times.