For many analysts, it came out of nowhere: a report last week that the nation’s rapidly rising unemployment numbers had suddenly taken a new turn. It was improving.

According to those figures, the US unemployment rate fell to 13.3% in May from 14.7% a month earlier, with 2.5 million jobs gained (yes, gained). At least that’s the Department of Labor’s first read of the nation’s employment environment. The consensus prediction had been for the country to shed 7.5 million jobs and the unemployment rate to rise close to 20%. “We’re seeing a glimmer of hope,” says Seth Steinberg, a principal in Korn Ferry’s Supply Chain Center of Expertise. (Initial unemployment claims fell to 1.5 million, according to the most recent data, to a total of 20.9 million.)

That alone is reason to celebrate, many believe. After all, it was only a couple months ago that the stock market was crashing and layoffs dominated the news. Still, at the moment, experts caution using the words “recovery” and “jobs” in the same sentence. As quickly as employers shed jobs at the start of the pandemic, there are many reasons why they won’t rehire remotely as fast. And don’t be surprised to still see headlines about layoffs.

Indeed, the toll of two months with zero or severely limited sales has forced companies to continue looking for costs to cut yet again. According to Nathan Blain, a senior client partner at Korn Ferry and global leader of its Organizational Strategy and Digital Transformation practice, one firm that recently brought back some furloughed employees is this week laying off employees from its corporate headquarters. “We aren’t even close to seeing the end of the layoffs,” he says.

Last week’s report—which boosted stocks initially—caught many off guard because so many industries are still badly battered by COVID-19. But it made sense to some: as states loosen their COVID-19 shelter-in-place restrictions, hundreds of thousands of small businesses are bringing back at least some of their employees. “That kind of hiring could be contributing to the positive direction of the numbers,” says Blain.

There were big job gains in residential construction and, unsurprisingly, healthcare. But retail employment gained 368,000 jobs as well. Perhaps the biggest surprise was the 1.2 million jobs added in the leisure and hospitality sector. Bars and restaurants accounted for most of the gains, but some travel-related properties are beginning to bring back employees. In some cases, hotel firms are bringing back staff, or even filling open roles, before the properties reopen, says Radhika Papandreou, a Korn Ferry senior client partner and sector lead for the firm’s Travel, Hospitality, and Leisure practice. “There’s a minimal threshold for staff at each property. Even if there’s not full demand, you have to bring back minimum staff,” she says.

All of May’s job gains, of course, pale in comparison to the steep job losses for the two months beforehand. Companies will be loath to bring back everyone at once, experts say. For one thing, many firms are still trying to figure out how much demand there is for their products or services. As of mid-May, there were nearly 30 million people receiving unemployment benefits, and people tend to cut back on their spending when they have no job.

At the same time, COVID-19 restrictions have only been loosened, not eliminated. Many cities are limiting the number of people in stores and restaurants, which means fewer employees are needed. Those restrictions are being lifted gradually now but could snap right back if the coronavirus starts spreading rapidly again. 

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