The US Economy Added 139,000 Jobs in May, Slightly More Than Expected
The U.S. economy added 139,000 jobs in May, a modest gain that slightly exceeded expectations but signaled a continuing slowdown in the labor market, according to data released Friday by the Bureau of Labor Statistics (BLS).
The report showed job creation easing from April’s revised figure of 147,000, while the unemployment rate remained unchanged at 4.2%. Wages continued to grow faster than inflation, but deeper data in the report suggested that the labor market’s resilience may be weakening.
“This isn’t a collapse, but it’s a clear sign of cooling,” said Gregory Daco, chief economist at EY-Parthenon. “The momentum that carried the job market through the past few years is starting to wane.”
Sectors Narrow, Revisions Deepen the Slowdown
Nearly 91% of May’s job gains came from just two sectors: health care and social assistance, and leisure and hospitality. Other major industries saw limited growth, and manufacturing lost 8,000 jobs. Overall, only half of all major industries added jobs, indicating broader softness in the labor market.
The federal government posted the steepest losses last month, shedding 22,000 jobs—its fourth consecutive month of decline. These losses are linked to sharp spending cuts and downsizing efforts under the Trump administration. Experts say the impact may ripple beyond government agencies.
“We’re starting to see fallout in the private sector,” noted Diane Swonk, chief economist at KPMG. “Scientific research and development, for instance, is bleeding jobs as a result.”
The BLS also revised March and April’s employment gains downward by a combined 95,000 jobs, pulling the monthly average for 2024 to just under 124,000. While still above the 100,000 mark considered necessary to keep pace with population growth, this represents the weakest non-recession January–May average in three decades.
Signs of Caution Amid Political and Economic Uncertainty
Economists have pointed to policy volatility – particularly around trade tariffs, federal spending, and immigration – as key drivers of business hesitation. These uncertainties have frozen hiring plans and clouded economic forecasts.
“This isn’t a freeze – it’s a chill,” said Ger Doyle of ManpowerGroup. “Employers are holding steady, employees are staying put, and both are waiting for clearer direction.”
Data from the BLS also revealed a dip in labor force participation, falling to 62.4%. Participation among older women and prime-age men declined notably, with some reportedly turning to education or training as job opportunities become less certain.
Fed Expected to Stay Put – For Now
Despite the signs of strain, the labor market remains stable enough to keep the Federal Reserve from immediate action. With inflation still a concern, analysts believe the Fed will maintain its current stance for now but may consider rate cuts later in the year.
Wells Fargo economists wrote that the May figures “support a pause” but added that “softening job market indicators could prompt the Fed to cut rates by year-end.”
Former President Donald Trump weighed in on the issue Friday, posting on Truth Social that borrowing costs were “costing our country a fortune” and calling for interest rates to be “MUCH LOWER!!!”
A Streak Under Pressure
May marked the 53rd consecutive month of job gains – a near-record streak – but many economists believe that streak could be in jeopardy. The report, while not signaling immediate danger, adds to growing concerns that the economy is entering a more fragile phase.
As Daniel Zhao, lead economist at Glassdoor, put it: “The job market is still standing tall, but we may be one headwind away from a stumble.”
