The Purchasing Managers’ Index (PMI) from the Institute for Supply Management’s (ISM) Manufacturing Report increased to 43.1% in May, up from April’s 41.5%, which was the lowest reading since 39.9% in April 2009. All manufacturing industry sectors other than Food, Beverage & Tobacco contracted for the month, but the overall rate of manufacturing contraction was slowing. The ISM’s Non-Manufacturing Index similarly rose in May to 45.4% from 41.8% in April, with growth for the Agriculture, Finance, Public Administration and Information industries. As with manufacturing, non-manufacturing continued to contract, but at a slower rate. Respondents in both reports noted demand was beginning to increase and business was beginning to pick up, with manufacturing respondents reporting more optimism than non-manufacturing respondents..

U.S. imports fell by $31.8 billion in April to $200.7 billion, but exports fell by an even larger $38.9 billion to $151.3 billion, raising the trade deficit to $49.4 billion (+16.7%). Goods exports fell significantly for capital goods (-10.1 billion), led by civilian aircraft exports, industrial supplies (-$9.1 billion), which include crude oil, and automotive vehicles (-7.4 billion). Goods imports fell for automotive vehicles (-14.5 billion), capital goods (-5.8 billion), led by semiconductors, and consumer goods (-$3.1 billion), led by pharmaceuticals. Service exports decreased -$6.7 billion to $55.8 billion, and service imports fell by -$5.4 billion to $33.3 billion, narrowing the surplus in services to $22.5 billion. Per country, the largest trade deficits were with China ($26.0 billion), followed by the European Union ($14.3 billion), and Germany ($4.1 billion), and the largest surpluses were with South and Central America ($2.9 billion), OPEC ($1.4 billion), and Brazil ($0.8 billion)..

Employment rose by +2.5 million in May, dropping the unemployment rate -1.4% to 13.3%, although, as with April’s report, an explanatory note cited inconsistencies in data collection that may have underestimated the unemployment rate by 3%. Workers who had permanently lost their jobs increased by 295,000, but temporarily laid off workers decreased by -2.7 million as coronavirus restrictions were lifted. Employment increased significantly for leisure and hospitality (+1.2 million), construction (+464,000), education and health services (+424,000), retail trade (+368,000), and manufacturing (+225,000). Jobs were lost for government workers (-585,000), information (-38,000), mining (-20,000), and transportation (-19.000). The U6 unemployment rate, which includes discouraged and underemployed workers, fell -1.5% to 21.2%.