Monday, August 4, 2025

US Unemployment Rate Falls to 5.8% as States Lift Covid-19 Restrictions

America’s labour market picked up steam in May, as much of the country lifts restrictions and businesses make some headway in filling a record level of vacant positions.

According to the latest report published by the BLS, US payrolls increased 559,000 in May, following a revised 278,000 gain in the previous month. The latest figures put the US unemployment rate at 5.8%, while the labour force participation rate— which is closely monitored by the Federal Reserve— remained relatively unchanged at 61.6%.

Source: BLS

The month of May has been an inflection point for the US economy, particularly as vaccination rates gain significant momentum and an increasing number of states completely lift Covid-19 restrictions. Restaurants and bars noted some of the largest payrolls increases, with a jump of 186,000 jobs, showed the Labour Department’s data.

Although the latest payroll gain is positive for the US economic recovery, The consensus estimate among economists surveyed by Bloomberg called for a 675,000 increase. The disparity between the two figures suggests that there continue to be significant supply constraints, as well as ongoing labour shortages. Employers have been desperate to fill vacant positions as consumers’ demand for goods and services strongly resumes.

Despite the payrolls gain, America’s labour market still faces a 7.6 million-jobs shortfall compared to pre-pandemic levels. The rocky recovery in employment levels albeit an increased level of vacancies is in part due to generous unemployment benefits that have served as a deterrent in getting Americans back to work. The heightened demand for labour amid the economic recovery has also put upward pressure on wages. According the BLS, average hourly earnings jumped 0.5% to $30.33 in May.


Information for this briefing was found via the BLS. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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