Employers added 2.5 million nonfarm jobs in May after April’s 20.5 million layoffs, . May’s rate of unemployment dropped to 13.3% versus 14.7% in April.

Some economists had spoken of May’s unemployment rate reaching 20%, rivaling the depths of the Great Depression. Instead, the labor market improved due to a partial resuming of economic activity after its curtailment in March and April to slow the spread of the COVID-19 pandemic, e.g., sheltering in place and closing hospitality, leisure and retail commerce.

Areas of the economy did not rebound in May. For example, school closures remained in effect, replaced with distance learning. That fact in part drove the loss of 585,000 government jobs between April and May, with the cloud of more government employment losses on the horizon.

We also turn to employment rates of demographic groups. For adult men and women, whites and Hispanics, the unemployment rate decreased in May versus April, while the jobless rates for teens, blacks and Asians “showed little change over the month,” the BLS reported.

May’s average hourly earnings for all private nonfarm workers dropped by 29 cents to $29.75 versus a rise of $1.35 in April, according to the BLS. For all workers on nonfarm payrolls, May’s workweek hours rose by 0.5 of an hour to 34.7 hours.

Large firms of 500 or more workers laid off 1,604,000 employees in May versus 8,963,000 in April. Midsize firms of 50-499 workers culled 722,000 jobs in May compared with April’s 5.3 million total. Small firms of 1-49 employees lost 435,000 jobs in May versus 6 million in April.

counts only nonfarm private-sector payrolls.

Goods-making firms shed 794,000 jobs in May, down from April’s loss of 4.23 million. Manufacturing payrolls lost 719,000 jobs in May after 1,674,000 layoffs in April. In the dominant service sector, May’s job losses were 1.97 million compared with 16 million layoffs in April.

Ahu Yildirmaz co-heads the ADP Research Institute. “The impact of the COVID-19 crisis continues to weigh on businesses of all sizes,” she said in a statement. “While the labor market is still reeling from the effects of the pandemic, job loss likely peaked in April, as many states have begun a phased reopening of businesses.”

Meanwhile, states and local governments are facing deep spending cuts due to the carnage in the labor market and among businesses during the pandemic quarantine. Neither state nor local governments strapped for tax revenue as their spending rises on coronavirus pandemic health measures can run budget deficits as Uncle Sam can and does.

However, increased federal aid to state and local governments faces opposition from President Trump and the GOP-run Senate. would help the private sector as well, while improving the prospects for an economic recovery from the sharpest downturn since the Great Depression of the 1930s, with 19.6 million jobs lost since February, , a senior economist at the Economic Policy Institute in Washington, D.C.