- The U.S. economy added 139,000 jobs in May, beating expectations with private sector hiring leading the growth, despite losses in manufacturing and government employment.
- Federal government employment fell by 22,000 in May, part of a 59,000-job reduction since January, aligning with President Donald Trump's push to shrink the federal workforce.
- Average hourly earnings rose 0.4 percent in May and 3.9 percent over the past year, giving workers more purchasing power as wage growth continues to outpace inflation.
- The labor force participation rate dipped to 62.4 percent, and downward revisions to March and April data cut a combined 95,000 jobs from previous estimates.
- Trump's aggressive trade policies, especially new tariffs, have fueled economic uncertainty. While the job market remains steady, economists warn that potential negative effects may soon become more visible.
A new data released by the Department of Labor has revealed that the U.S. economy added 139,000 jobs in May, outperforming economists' expectations of 125,000.
According to the data released on June 6, private sector hiring was the key driver of May's gains, contributing 140,000 new positions and exceeding the projected 120,000. The services industry led the charge with an addition of 145,000 jobs, while the goods-producing sector shed 5,000 positions, including a notable loss of 8,000 manufacturing jobs.
A revised report showed April's manufacturing numbers were stronger than previously thought, with a gain of 5,000 jobs rather than a 1,000-job loss.
Federal government employment saw a sharp decline of 22,000 jobs in May, part of a larger trend of shrinking government payrolls under the second administration of President Donald Trump. Since January, federal employment has fallen by 59,000 positions, reflecting the administration's ongoing push to reduce the size of the federal workforce.
Average hourly earnings rose 0.4 percent in May, doubling April's pace and exceeding expectations. Over the past year, wages have increased by 3.9 percent, outpacing inflation and providing workers with improved purchasing power.
The labor force participation rate, however, dipped slightly to 62.4 percent from 62.6 percent in April, suggesting a modest pullback in workforce engagement.
Adding some caution to the report were downward revisions to job growth in previous months. March's job total was reduced by 65,000 to 120,000, while April's was cut by 30,000 to 147,000. The combined revision means 95,000 fewer jobs were created than initially reported over the two months.
Despite the revisions, the broader trend remains one of steady if modest growth. Over the past 12 months, the economy has averaged 149,000 new jobs per month – a pace that reflects continued resilience in the face of policy shifts and global uncertainty.
Job market still standing tall amid Trump's aggressive policies
Economists are now closely watching how these trends evolve, particularly with upcoming Federal Reserve meetings and ongoing political discussions around government spending and regulation.
Trump's aggressive policies, particularly his sweeping tariffs on imports, have created significant uncertainty around the U.S. economy and job market, fueling fears that the country could be headed toward a recession.
"Employers have been hoarding labor in the face of massive corrosive uncertainty," said Carl Weinberg, chief economist at High Frequency Economics. "We believe firms have been reluctant to lay off workers until they saw the extent of the Trump tariffs. Now that the tariffs are out in the open, we believe most firms see the writing on the wall and will start workforce reductions right now." (Related: Trump's tariffs will create millions of jobs.)
However, despite the rising concerns, the economic fallout from these policies has not yet been clearly reflected in government data.
"The job market is still standing tall even as some of these headwinds start to blow," said Daniel Zhao, lead economist at the jobs website Glassdoor. "But ultimately we're all still waiting for the other shoe to drop. It's still much too early for tariff impacts to be a significant drag on the economy."
Learn more about the actual state of the American economy at Bubble.news.
Watch the video below where Antoni discussed how the U.S. labor market is nowhere near as robust as people thought it was.
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