Chart of the Day: Net New Jobs in May

Here’s a surprise: after two months of massive job losses, we actually gained jobs in May:

The BLS tells us this: “The number of unemployed persons who were on temporary layoff decreased by 2.7 million.” That seems to explain things: as the economy reopened, laid off workers were called back and that accounts for the rebound in jobs. The increases came mostly in the areas of health care, retail, and hospitality (i.e., restaurants).

However, although this is good news there’s a big black cloud in the middle of it: the number of government employees shrank by nearly 600,000. Some of these workers might eventually be recalled, but unless Congress passes a rescue bill that includes aid to states and cities a lot of them will be permanently out of work. This would be a big headwind working against recovery, just as it was after the Great Recession.