US added 139K jobs in May, in line with expectations

The U.S. added 139,000 jobs in May and the jobless rate held steady at 4.2 percent, according to data released Friday by the Labor Department.

The May jobs report showed the U.S. economy keeping pace despite uncertainty driven by President Trump’s trade policy, largely matching the expectations of economists. The U.S. was projected to add roughly 125,000 jobs, according to consensus estimates.

Employment growth in May was concentrated in health care and hospitality jobs, while many other sectors stayed flat.

Health care gained 62,000 jobs, exceeding recent averages, with about 60,000 jobs added between hospital services and ambulatory care services. Hospitality jobs were up by 48,000.

Employment stayed mostly flat across construction, warehousing, manufacturing, transportation and mining.

Wages grew by 0.4 percent to hit an average of $36.24 in May. Wage growth has been trending down in recent months, though it has been outpacing declining inflation.

“May’s healthy jobs report highlights ongoing stability in the labor market, signaling that an economic slowdown is not imminent and that the Fed does not need to rush to cut interest rates,” Joe Gaffoglio, CEO of Mutual Of America Capital Management, said in a commentary.

The healthy jobs number likely strengthens the Federal Reserve’s wait-and-see posture when it comes to cutting interest rates.

The U.S. central bank has left rates at a range of 4.25 percent to 4.5 percent since January after starting to cut them last year, citing policy uncertainty and Trump’s trade war as reasons to hold off from cuts.

This has led to tensions with Trump, who has blasted Fed Chair Jerome Powell for his reluctance to spur the economy with lower interest rates in the face of his trade war, which is expected to add to inflation.

A weak private employment report from ADP Research Institute earlier this week prompted additional criticism from Trump. ADP clocked just 37,000 new jobs added in April, off predictions of more than 100,000. The ADP survey has had some reliability issues compared to government surveys during the postpandemic period.

“ADP number out. ‘Too Late’ Powell must now lower the rate. He is unbelievable. Europe has lowered nine times,” the president commented in a Truth Social post this week.

Following government cost-cutting efforts undertaken by the Trump administration, the May jobs report showed a decrease in federal employment of 22,000 jobs. Federal employment is down by about 60,000 jobs since the beginning of the year. Cuts have been made at numerous agencies, including the IRS and the U.S. Agency for International Development.

“All things considered, this is a good jobs report. The labor market continues to slow steadily, but the sky is not falling,” Olu Sonola, U.S. economist with Fitch Ratings, said. “Given the backdrop of trade policy uncertainties, the Fed will be relieved with this report.

Labor force participation declined in May, dropping to 62.4 percent from 62.6 percent in April and eliciting some concern from economists. The size of the labor force declined slightly in May after increasing in April.

“Beneath the surface, there are a number of blemishes to be found. Labor force participation declined and sector participation in job creation was less than consistent,” Bankrate economic analyst Mark Hamrick commented.

Updated at 9:13 a.m. EDT