The latest employment report released by the U.S. Bureau of Labor Statistics on Friday shows that job growth in May slowed down, but still exceeded expectations. The addition of non-farm payrolls was 139,000, higher than the Dow Jones forecast of 125,000, with the unemployment rate holding steady at 4.2%. However, there was an acceleration in wage growth.
The Bureau of Labor Statistics also revised down the April job gains from the previously reported 177,000 to 147,000.
In terms of specific industries, the healthcare sector continued to lead in growth, adding 62,000 jobs in May, surpassing the average monthly increase over the past year of 44,000. Other sectors with significant job growth include leisure and hospitality (48,000) and social assistance (16,000).
In May, federal government employment continued to decline by 22,000. Since January, federal government employment has decreased by 59,000, but employees on paid leave or receiving severance pay are not counted as unemployed.
Average hourly wages in May saw a growth rate that exceeded expectations, rising 0.4% month-on-month to $36.24 per hour, an increase of 3.9% compared to the previous year. Both the month-on-month and year-on-year increases were higher than the expected 0.3% and 3.7%, respectively.
This employment report comes amid ongoing economic uncertainties in the United States.
While most indicators show that the economy is still a considerable distance away from a recession, sentiment surveys indicate that consumers and corporate executives are anxious. They are preparing for the ultimate impacts of Trump’s tariffs on commercial activities and increased inflation.
Federal Reserve officials are cautious about the current situation. The Fed is set to hold its next policy meeting in less than two weeks. It is widely anticipated that the Fed will announce maintaining interest rates unchanged.
According to CNBC, Eric Merlis, Managing Director and Co-Head of Global Markets at Citizens, stated that “today’s employment report will not be seen as a call for the Fed to cut rates.”
“Despite the unemployment rate remaining unchanged and other indicators suggesting a softening labor market, demand for workers remains stable as businesses adjust to policy changes,” Merlis said.