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The worst over? U.S. labor market unexpectedly improves in May

FILE PHOTO - A man speaks with a library worker after receiving an unemployment form, as the outbreak of coronavirus disease (COVID-19) continues, in Miami Beach, Florida, U.S., April 8, 2020. REUTERS/Marco Bello

REUTERS, JUNE 5, 2020

WASHINGTON (Reuters) – The U.S. economy unexpectedly added jobs in May after suffering record losses in the prior month, offering the clearest signal yet that the downturn triggered by the COVID-19 pandemic was probably over, though the road to recovery could be long.

The Labor Department’s closely watched employment report on Friday also showed the jobless rate falling to 13.3% last month from 14.7% in April, a post World War Two high. It came on the heels of surveys showing consumer confidence, manufacturing and services industries stabilizing.

Economic conditions have significantly improved as businesses reopened after shuttering in mid-March to slow the spread of COVID-19.

Nonfarm payrolls rose by 2.509 million jobs last month after a record plunge of 20.687 million in April. Economists polled by Reuters had forecast the unemployment rate jumping to 19.8% in May and payrolls falling by 8 million jobs.

U.S. stock index futures sharply extended gains. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

“These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus pandemic and efforts to contain it,” The Labor Department said in a statement.

Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci

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