PNC Bank Chief Economist Gus Faucher had expected the unemployment rate to jump to 19.3 percent in May from 14.7 percent in April.
Economists surveyed by FactSet and reported in the New York Times had expected the unemployment rate would hit 19.8 percent, the highest level since the Great Depression.
“This would be the highest unemployment rate since the Great Depression,” Faucher said in a note Thursday. “The unemployment rate will decline steadily in the second half of 2020 as economic activity resumes, but will remain elevated over the next couple of years.”
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Faucher expected the May jobs report was likely to show job losses of around 8.5 million, based on the pattern in unemployment insurance claims from mid-April to mid-May.
However, Faucher also pointed to signs of hope: May private-sector job losses based on data from payroll-processing firm ADP were 2.76 million, much less than the consensus estimate of 9 million.
“Layoffs have slowed dramatically since the end of March as states have gradually lifted restrictions on movement and economic activity has picked back up,” Faucher said. “And the decline in continuing claims in mid-May, even with the increase the week ending May 23, suggests that job gains as businesses restart may be outweighing job losses, and that net monthly job growth could resume in June.”