The labor market persevered in May, continuing a consistent run of job creation that has outlasted inflation, interest rate increases and now an on-again-off-again trade war.
Employers added 139,000 jobs last month, the Labor Department reported Friday, about in line with economists’ expectations. The unemployment rate remained at 4.2 percent.
The steady hiring is an indication that businesses are still seeing enough demand for goods and services that they will fill open roles and add new ones, even if they’re no longer expanding as quickly as they had over the past few years.
The growth stemmed mostly from health care and social assistance, which added 78,000 positions, as well as leisure and hospitality, at 48,000. Most other sectors were flat, including manufacturing, which shed 8,000 jobs.
That lopsidedness suggests that growth isn’t as broad-based as economists might like. Growth in health care is fueled in large part by the aging of the U.S. population; it is not always a reliable measure of the strength of the overall economy.
“Outside of really health care and social assistance, there isn’t that much hiring demand across the economy,” said Sam Kuhn, an economist at the digital recruiting firm Appcast. He noted that the annual average pace of job growth, outside the pandemic downturn, is lower than it’s been in over a decade.
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Fading spring: The number of jobs created in March and April was revised down by a combined 95,000, suggesting that the start of the year was weaker than it appeared initially.
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DOGE effect: The federal government shed 22,000 jobs in May and is down 59,000 since January. That’s not counting those on administrative leave, or who were let go when federal contracts were cut.
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Wages still strong: Average hourly earnings rose 0.4 percent from a month earlier, a bigger gain than expected. Hourly earnings are up 3.9 percent from last year.
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People dropping out: Labor force participation was a weak spot in the report. The share of people age 25 to 54 who were working or looking for work dropped to 83.4 percent and now looks to have plateaued after nearing a two-decade high.
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What they’re saying: Lindsay Rosner, of Goldman Sachs Asset Management, said this was too strong a report to allow the Fed to cut interest rates soon. “With the Fed laser-focused on managing the risks to the inflation side of its mandate, today’s stronger-than-expected jobs report will do little to alter its patient approach,” she wrote in a note to clients.
Lydia DePillis reports on the American economy. She has been a journalist since 2009, and can be reached at [email protected].
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