The Labor Statistics Bureau reported Friday that it fell slightly in May despite consumers and businesses slowing tariffs and potentially slowing the economy.
Non-farm payroll increased by 139,000 that month, estimated the muted Dow Jones estimate at 125,000, a little below the 147,000 added by the US economy in April.
The unemployment rate was stable at 4.2%. More comprehensive measures including discouraged workers and unemployed remained unchanged, holding at 7.8%.
Workers’ salaries increased more than expected, with average hourly wages increasing by 0.4% that month, 0.3% and 3.7% compared to their respective forecasts.
“Stronger than expected employment growth and stable unemployment highlight the resilience of the US labor market in the face of recent shocks,” said Lindsay Rosner, multi-sector bond investment director investing in Goldman Sachs Asset Management.
Almost half of employment growth came from healthcare, which added 62,000 more than an average increase of 44,000 over the past year. Leisure and hospitality contributed 48,000, while social support added 16,000.
On the downside, the government lost 22,000 jobs as President Donald Trump’s federal workforce and Elon Musk-led government efficiency efforts began to affect it.
Stock market futures rose after release, similar to Treasury yields.
The May numbers were better than expected, but there were some underlying trouble spots.
The April count was revised to 30,000, but the total for March went from 65,000 to 120,000.
There was also a disparity between the establishment surveys used to generate gains for headline payroll and household surveys used for unemployment. The latter number was generally more volatile than facility surveys, indicating a decline of 696,000 workers. Full-time workers fell 623,000, while part-time workers rose 33,000.
“The Jobs Report in May has everyone still waiting for the other shoes to fall,” said Daniel Zhao, lead economist at job assessment site Glassdoor. “This report shows the job market is standing tall, but as economic headwinds accumulate, it’s only a matter of time before the job market gets nervous about those headwinds.”
The report contradicts the wobble economic background, complicated by Trump’s tariffs and the ever-changing variables of distance he seeks to level the global playing field for American goods.
Most indicators show that the economy remains well away from the recession. However, sentimental research shows a high degree of anxiety from both consumers and business leaders. They are because the amount of tariffs slows down business activities and prevents the ultimate impact of increasing inflation.
On their part, Federal Reserve officials look carefully at the current landscape.
The central bank will hold its next policy meeting within two weeks, with the market expecting primarily the Fed to remain on hold on interest rates. In a recent speech, policymakers have expressed greater concern about possible tariff-related inflation.
“Because we focus on Fed lasers and manage risks to the inflationary side of its mission, job reports that are stronger than we expected today will rarely change the patient’s approach.”
Friday is also the last day before Fed officials head into a quiet period before meetings and will not issue policy statements.
