Stronger-than-expected May jobs report as unemployment holds steady
The U.S. labor market added more jobs than expected in May, according to the Bureau of Labor Statistics (BLS) report released Friday, June 6. Employers added 139,000 jobs last month – down from 177,000 in April but ahead of analysts’ expectations of 125,000.
The national unemployment rate held steady at 4.2%, unchanged from April.
The number of unemployed workers remains at approximately 7.2 million.
Which sectors are seeing job growth?
The BLS described May’s job growth as “similar” to the 12-month average of 144,000 new jobs per month. Gains were concentrated in health care, leisure, hospitality and social assistance, while job losses continued in the federal government.
Health care led the way, adding 62,000 jobs in May. Meanwhile, the Trump administration’s efforts to shrink the federal workforce appeared to continue, with the government reporting 22,000 federal job cuts in May and 59,000 since January. However, that figure may underestimate the total impact – individuals on paid leave or receiving severance are not classified as unemployed.
Job market
The U.S. labor market added 139,000 jobs in May which beat analysts expectations of 125,000. The May unemployment rate was unchanged at 4.2%.
How are the markets reacting to the labor news?
Wall Street responded positively to the report. Minutes after its release, Dow Jones Industrial Average futures were up 160 points, S&P 500 futures rose by 25 points, and the tech-heavy Nasdaq climbed 90 points.
Federal Reserve Gov. Adriana Kugler said Thursday, June 5, “One encouraging sign about economic activity is the resilience of the labor market… and that labor supply and demand remain in relative balance.”
Analysts had warned that a jobs number below 100,000 could raise fresh concerns about a looming recession. Friday’s figure, though a dip from April, was strong enough to ease those fears.
Trade and Fed policy also in focus
Attention also remains on trade developments, as President Donald Trump’s 90-day negotiating window with several foreign nations, most notably in China, continues into July. On Thursday, Trump posted on Truth Social that he had “a very good phone call with President Xi of China, discussing some of the intricacies of our recently made, and agreed to, Trade Deal.” He said the call lasted about 90 minutes and that further talks between the two countries are planned at a location to be determined.
The Federal Reserve’s next interest rate decision is also under scrutiny. President Trump has continued pushing Fed Chair Jerome Powell to cut rates from their current 4.25% to 4.5% range. Earlier this week, Trump wrote on Truth Social, saying, “Too Late Powell must now lower the rate. He is unbelievable.”
As of May, the inflation rate stands at 2.3%, according to the BLS – just above the Fed’s 2% target, complicating the case for an immediate rate cut.
Ella Rae Greene, Editor In Chief
