U.S. Employment Results – May 2020

Analysis by Barbara Byrne Denham


The U.S. added 2.5 million jobs in May, after losing a revised 22.1 million jobs March and April. This surprisingly good news has already boosted morale as well as the stock market as most had expected further declines. While the May report was a welcome development, the economy is not out of the woods. Many small businesses are surviving due to their funding from the Payroll Protection Program that incentivizes companies to keep staff on their payroll. If the program is not renewed this month, many of these firms will make cuts and the results will show in the July or August numbers just as more of the economy should be opening.


Highlights for May’s Employment Picture

Below is the breakdown of industries that are important to the property markets. Note the headings that show the gain in May vis-à-vis the prior two-month loss since the peak in February. This shows, for example, that restaurants have restored just over one-fifth of the jobs that had been cut. Also note the added “services to buildings” category that includes all janitorial, landscaping and cleaning services to buildings. This industry that caters to the office sector had shed 30% in the prior two months and added back only 1.9% in May.



Other Highlights

  • The construction industry added back close to half of the jobs shed over the prior two months.
  • The office sector had lost disproportionately fewer jobs during the pandemic, particularly in finance and insurance that declined less than 1%. Computer systems design firms, which include most technology firms, also saw minimal job losses in April, but it saw further losses in May as did the information sector.
  • The warehouse and storage sector declined only 6.8% but has added back fewer than most industries.
  • Clothing and accessory stores had shed 61% of its jobs in two months. Even though 19% has returned, this retail category will struggle to add more jobs back due to the closing of stores, the growth in e-commerce and waning demand given the increase in working from home.



The BLS data for U.S. employment goes back to 1939 and confirms that the 13.7% decline in April was the largest one-month loss since prior to then, or likely the Great Depression. The one-month positive gain in May was welcome news that the worst could be in the past, but again, this sentiment could be premature. Some parts of the country are showing rising COVID cases including most of Texas and other parts of the south. While this may look isolated, travelers could continue to spread the virus to healthier parts of the U.S. But much is still riding on the PPP and whether Congress will renew funding. As mentioned above, if they do not, many small businesses that have been waiting out the quarantine with a full staff but minimal revenue will need to cut jobs and the numbers will show in July and August reports just as many will hope or assume that the recovery is underway.


Barbara Byrne Denham is a Senior Economist in the research and economics department at Moody’s Analytics, the team responsible for the firm’s market forecasting, valuation, and portfolio analytics services. Throughout her 20-year career, Barbara has written a number of white papers on the commercial real estate market.

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