In what can only be described as an employment whipsaw, the United States Bureau of Labor Statistics (BLS) claimed the US has had the biggest one-month jobs gain in U.S. history since at least 1939. The BLS is reporting that employment  rose by 2.5 million in May, and the jobless rate declined to 13.3%. Economists had predicted the official unemployment rate will climb to 19% in May, a MarketWatch survey showed. The number may not be an accurate reflection of the real picture (see below). Bias persists, with black unemployment rising and Latina unemployment remaining close to 18%.

The stock market is responding positively to the news, with futures rising broadly.

Construction lead the way, with 464,000 hires. Education and health services rose by 424,000, with retail adding 368,000.

While the number appears strong, it hides millions of additional unemployed due to what can only be characterized as fuzzy accounting. Due to what they claimed was an error in their methodology going back to March, the actual number is likely at least 16.3%. A large number of workers were not counted as unemployed due to a murky grey area the BLS calls "employed but absent from work for 'other '". Furloughed employees would likely fall into this category, as an example. A more encompassing unemployment figure that includes discouraged workers and those holding part-time jobs for economic reasons fell to 21.2% from 22.8%, the highest in the series history.

Were this becomes troubling is that the BLS typically corrects errors when they find them. Reached for comment, Mike Wolford, Director Of Customer Success at Claro Workforce Analytics, noted:

"I've been looking at BLS data for years.  When they make a mistake they just note it and update it. Here they made an error in March, knew about it and still kept the error in April's numbers, and then didn't disclose until investigatory reporters asked why there was such a gap between 40 million unemployment claims and their 21 million number. It's going to be the next scandal. Was this done on purpose? Leaving 5 million unemployed out of your count for 2 months... looks political."

In addition, there is a 6.4 million discrepancy between as noted by Mike "Mish" Shedlock on TheStreet:

1. The number of employed fell by 22.369 million.
2. The number of unemployed only rose by 15.938 million.
3. The employment discrepancy is 22.369 - 15.938 = 6.431 million

As a political windfall to the President, during an election year, data manipulation at this level will be investigated broadly and will likely trigger Congressional investigations.

Some things to note.

1. The gains are not even. Black unemployment numbers rose in May, while white unemployment went down - the recovery may in fact not benefit the entire nation. Black unemployment now stands at 16.8 percent, a slight uptick from the 16.7 unemployment rate in April, according to BLS numbers.
2. Black unemployment in May represented the highest rate in more than a decade, according to an analysis of BLS statistics by Bloomberg.
3. Intervention seems to have worked. The Paycheck Protection Program (PPP) provided enough protection (on aggregate) to businesses to allow them to keep more employees than expected. Congress will have to decide whether or not to extend these benefits after July.
4. The US is not out of the woods yet. A second wave of virus would likely alter this trajectory. According to Mark Zandi, the chief economist at Moody's Analytics: "The market is attaching a pretty high probability to a V-shaped recovery," he said, adding: "I suspect that the script on this bear market is not over. We're going to see the market have to reevaluate things at some point."

RNN will continue to update this story as it develops.

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