Hiring remained steady in May and the unemployment rate was unchanged in a crucial economic report as some worried that heightened uncertainty amid President Trump’s tariffs would start to hit jobs.
US employers added 139,000 jobs last month, above expectations of 125,000, the Labor Department said Friday.
The unemployment rate held steady at 4.2%, even as some economists had cautioned that uncertainty could start to flame this figure.
“While it’s encouraging to see that the economy still added a healthy clip of jobs during the month of May, the next few jobs reports will be particularly important since a continued deceleration could push the Federal Reserve to cut interest rates sooner than later,” Glen Smith, chief investment officer at GDS Wealth Management, said in a note.
“Friday’s jobs report shows slowing but still solid growth, which may warrant a rate cut at some point towards the end of the year, at the Fed’s November or December meetings.”
The Dow Jones, S&P 500 and Nasdaq ticked up after the report’s release.
The nonfarm payroll employment figures for March and April were revised down by a combined 95,000 jobs. That means May’s 139,000 positions falls roughly in line with the average of 149,000 over the past 12 months.
Friday’s job report is expected to extend the Federal Reserve’s wait-and-see approach to cutting interest rates – even as Trump has continued to pressure “Too Late” Fed Chair Jerome Powell to slash rates.
Some aspects of the data did signal struggles, however, as the labor force shrank by 625,000 and the participation rate, which measures the share of adults working or looking for work, dropped by two-tenths of a point.
Employment continued to grow in health care, leisure and hospitality and social assistance.
Federal government jobs declined 22,000 in May. The total figure is down by 59,000 since January after Elon Musk’s Department of Government Efficiency took a hammer to government jobs in an effort to slash spending.
But May’s decrease was largely offset by state and local governments adding 21,000 jobs, resulting in a combined decline of just 1,000 overall government jobs.
Average hourly earnings jumped 15 cents, or 0.4%, to $36.24 in May. These earnings have increased 3.9% over the past 12 months.
Trump seemingly boasted about the jobs report soon after its release, though he did not mention it by name.
“AMERICA IS HOT! SIX MONTHS AGO IT WAS COLD AS ICE! BORDER IS CLOSED, PRICES ARE DOWN. WAGES ARE UP!” he wrote in a post on Truth Social Friday.
