AP Explains: Key takeaways from a surprising jobs report

BALTIMORE (AP) — No one saw it coming — 2.5 million job gains in May and a lower unemployment rate.

Economists, political aides and business leaders had been bracing for another horrific month of job cuts and swelling unemployment. In April, the coronavirus shutdown had caused 20 million-plus job losses. Mounting applications for unemployment benefits had suggested that the misery continued through May.

It didn't. The gap between what was expected and what happened when the Labor Department issued the jobs report Friday morning was so vast that it raised some doubts about its accuracy. But as analysts dug into the numbers, they found the numbers to be correct and suggested that the pessimistic forecasts might have mainly reflected how hard it is to gauge economic performance during a pandemic.

Here are five major takeaways from a jobs report that showed the economy faring better than believed, even if the overall picture remains bleak, with many millions still jobless and unemployment well into double digits.

IS THE UNEMPLOYMENT RATE REALLY 13.3%?

The drop in the unemployment rate was a shocker. Economists had expected the rate to approach 20%, driven up from 14.7% by job losses topping 8 million. Their forecasts woefully missed the mark. Part of the explanation is the difficulty of assessing data when the situation is changing so quickly.

But it also reflects an acknowledged difficulties by the Labor Department's Bureau of Labor Statistics in its information-gathering. Millions of people appeared to be erroneously classified by the survey as not working but employed. These people should have been classified as on temporary layoff and therefore unemployed. Had they been counted correctly, the jobless rate would have been roughly 3 points higher — 16% — the...