Hiring rose in May yet unemployment rates still high

WASHINGTON (AP) – Employers added jobs in 46 states last month, evidence that the United States (US) economy’s surprise hiring gain in May was spread broadly across the country – in both states that began reopening their economies early and those that did so only later.

Unemployment rates fell in 38 states, rose in three and were largely unchanged in nine, the Labor Department said on Friday. The disparities ranged from Nevada, with the highest rate (25.3 per cent), Hawaii (22.6 per cent) and Michigan (21.2 per cent) to Nebraska (5.2 per cent, the lowest) and Utah (8.5 per cent). The overall US unemployment rate in May was a still-high 13.3 per cent, a decline from 14.7 per cent in April.

As a whole, the figures illustrate the unusually broad nature of the recession, with all states enduring unemployment rates that soared in April as the coronavirus forced business closures and then generally fell in May but remained painfully high. During the 2008-2009 Great Recession, by contrast, 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 per cent and North Dakota’s 9.1 per cent.

At the same time, the viral outbreak has sharpened disparities among the states, with Nevada, with its hard-hit tourism industry, and Michigan, heavily affected by auto job cuts, reporting jobless rates more than double the rates in states like Utah and Wyoming. The gap between the highest and lowest states is slightly worse than during the 2008-2009 downturn.

The virus and the accompanying shutdowns have devastated most states’ economies.

Last month, four states recorded their highest unemployment rates on records dating to 1976: Massachusetts (16.3 per cent), Delaware (15.8 per cent), Florida (14.5 per cent) and Minnesota (9.9 per cent).

A person takes a peek inside the closed doors of the Pasadena Community Job Center in Pasadena, California. PHOTO: AP

Adam Kamins, senior regional economist at Moody’s Analytics, suggested 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. “Policies that benefit states similarly lifted all boats,” he said.

Even in Nevada there were some signs of life. The state gained nearly 33,000 jobs last month.

Justin Moscove, co-owner of seven Flowing Tide pubs, mostly in Reno and Las Vegas, said sales have been so strong that he’s rehired 95 per cent of his 200 employees, even though he is limited to half his dine-in capacity. Still, he thought much of the business reflects an initial surge from people tired of sheltering in place and may not last.

Nationwide, employers added 2.5 million jobs in April, an unexpected gain that suggested that the job market bottomed out in April and is gradually recovering.

Still, the number of people applying for unemployment aid has remained stubbornly high in the past several weeks, a sign that many businesses are still shedding jobs and clouding the outlook for jobs.