Nonfarm payrolls rose 139,000 for the month, above the muted Dow Jones estimate for 125,000 and a bit below the downwardly revised 147,000 that the U.S. economy added in April.
Leisure and hospitality contributed 48,000 while social assistance added 16,000.
The April count was revised lower by 30,000, while March’s total came down by 65,000 to 120,000.
“This report shows the job market standing tall, but as economic headwinds stack up cumulatively, it’s only a matter of time before the job market starts straining against those headwinds.”
“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,” said Rosner, the Goldman Sachs strategist.
Now watch.
As businesses and consumers prepared for tariffs and a potentially slowing economy, hiring fell only marginally in May, according to a report released Friday by the Bureau of Labor Statistics.
The monthly increase in nonfarm payrolls was 139,000, slightly less than the downwardly revised 147,000 that the U.S. government reported, and higher than the muted Dow Jones estimate of 125,000. S. economy was added in April.
At 4.2 percent, the unemployment rate remained stable. At 7–8%, a broader metric that accounts for underemployed people and discouraged workers remained constant.
The average hourly wage increased by 0.4 percent during the month and 30.9 percent from a year ago, which was higher than the corresponding forecasts of 0.3 percent and 3.7 percent.
“Stable unemployment and stronger than anticipated job growth highlight the US labor market’s resilience in the face of recent shocks,” stated Lindsay Rosner, Goldman Sachs Asset Management’s head of multi-sector fixed income investing.
Health care added 62,000 jobs, much more than its average gain of 44,000 over the previous year, accounting for nearly half of the job growth. 48,000 came from leisure and hospitality, and 16,000 from social assistance.
On the down side, the government lost 22,000 jobs as President Donald Trump’s and Elon Musk’s Department of Government Efficiency’s efforts to reduce the federal workforce started to show results.
Treasury yields and stock market futures both surged higher following the announcement.
There were a few underlying trouble spots even though the May numbers were better than anticipated.
The March total was reduced by 65,000 to 120,000, and the April count was reduced by 30,000.
The establishment survey, which is used to determine the headline payroll gain, and the household survey, which is used to determine the unemployment rate, also showed differences. There was a drop of 696,000 workers in the latter count, which was typically more erratic than the establishment survey. Part-time employees increased by 33,000, while full-time employees decreased by 623,000.
“Everyone is still waiting for the other shoe to drop,” stated Daniel Zhao, lead economist at Glassdoor, a website that rates jobs. The job market appears to be doing well, according to this report, but it will soon begin to struggle against economic headwinds as they accumulate over time. “,”.
Trump’s tariffs and the constantly shifting question of how far he will go to try to level the playing field for American goods globally complicate the already precarious economic backdrop against which the report is released.
The economy is still far from entering a recession, according to the majority of indicators. However, sentiment surveys show that both consumers and business executives are quite anxious as they prepare for the effects of tariffs, which are expected to slow business activity and raise inflation.
Federal Reserve officials, for their part, are taking a cautious approach to the current situation.
The markets mainly anticipate that the Fed will remain on hold with regard to interest rates at its next policy meeting, which is in less than two weeks. The possibility of tariff-induced inflation has become a greater concern for policymakers, according to recent speeches.
The Goldman Sachs strategist Rosner stated, “Today’s better-than-expected jobs report will do little to alter the Fed’s patient approach, as it is laser-focused on managing the risks to the inflation side of its mandate.”.
Additionally, Friday is the last day before Fed officials enter their private time leading up to the meeting, during which they will not make any policy announcements.
