.-') _ .-') _ | |
( OO ) ) ( OO ) ) | |
.-----. ,--./ ,--,' ,--./ ,--,' | |
' .--./ | \ | |\ | \ | |\ | |
| |('-. | \| | )| \| | ) | |
/_) |OO )| . |/ | . |/ | |
|| |`-'| | |\ | | |\ | | |
(_' '--'\ | | \ | | | \ | | |
`-----' `--' `--' `--' `--' | |
lite.cnn.com - on gopher - inofficial | |
ARTICLE VIEW: | |
• | |
6 min read | |
The US economy added 139,000 jobs in May, slightly more than expected | |
By Alicia Wallace, CNN | |
Updated: | |
12:13 PM EDT, Fri June 6, 2025 | |
Source: CNN | |
The long-resilient labor market slowed down a little in May, adding | |
139,000 jobs, according to Bureau of Labor Statistics data released | |
Friday. | |
Last month’s job gains, which came in slightly more than expected, | |
marked , which was downwardly revised to 147,000. | |
The unemployment rate held steady at 4.2%, and wage gains continued to | |
outpace inflation. | |
Those two numbers on their own — the monthly payroll gain and the | |
unemployment rate — indicate that the US labor market is cooling and | |
not collapsing. However, the guts of the report indicate that fissures | |
may be spreading, some economists warn. | |
“I don’t want to play Debbie Downer by just reading the headlines | |
and concluding nothing to worry about,” Gregory Daco, | |
EY-Parthenon’s chief economist, told CNN. “In my opinion, we are | |
starting to see an acceleration of labor market slowdown.” | |
Economists were expecting the economy to have added 130,000 jobs last | |
month and that the unemployment rate held at 4.2%, according to | |
FactSet consensus estimates. | |
Friday’s report painted a picture of a “steady but cautious” | |
labor market in the face of swelling economic uncertainty, said Ger | |
Doyle, regional president for North America at employment firm | |
ManpowerGroup. | |
President Donald Trump’s sweeping policy moves, especially a whipsaw | |
approach to massive import tariffs, have , rattled markets and clouded | |
businesses’ lines of sight. | |
“This is not a freeze, but a temporary chill,” Doyle wrote in | |
commentary Friday. “Employees are staying put, employers are holding | |
steady, and everyone is waiting for clearer signs.” | |
While the pace of job growth remains fairly solid, this year’s gains | |
were even softer than initially thought, Friday’s report showed. | |
March’s and April’s gains were revised down by a combined 95,000 | |
jobs, resulting in employment increasing by an average monthly clip of | |
nearly 124,000 jobs this year. | |
That may be above the 100,000 threshold (below which would be an | |
indicator of potential weakness), but, excluding recession years, | |
it’s the for January through May in the past 30 years, an analysis of | |
BLS data shows. | |
‘Waiting for the other shoe to drop’ | |
In the years following the economy-upheaving pandemic, job growth has | |
slowed, but it has not collapsed. The gains have to fuel consumer | |
spending and put the economy on track for a “soft landing” of | |
reining in inflation without triggering a recession. | |
May’s jobs report marks the 53rd consecutive month that the US | |
economy has added jobs, the second-longest streak of employment | |
expansion on record (behind the post-Great Recession/pre-Covid market | |
of late-2010 to early 2020), BLS data shows. | |
However, economists have warned that the Trump administration’s and | |
other actions — including drastic cutbacks to federal spending, , and | |
reductions in immigration — not only threaten those soft landing odds | |
but also heighten recession risks. | |
“The May jobs report still has everyone waiting for the other shoe to | |
drop,” Daniel Zhao, Glassdoor’s lead economist, wrote Friday. | |
“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.” | |
Not knowing the size and breadth of tariffs (but knowing they very well | |
might change), for example, has hindered businesses’ abilities to | |
operate and plan: They don’t know what their costs will be in three | |
months, let alone three days from now; and it’s even more unclear | |
whether consumers will keep spending. | |
Outlooks have quickly become opaque. | |
Scores of the largest public US companies for future earnings, | |
temporarily blinding analysts and investors. And small businesses that | |
have little room for error have been . | |
Although layoffs remain low, and , slowing the all-important | |
“churn” behind a healthy labor market. | |
“The labor market is revealing fragility,” Diane Swonk, chief | |
economist at KPMG, told CNN in an interview. “There’s no margin for | |
error when you’ve got a low pace of hiring, a low pace of quits.” | |
DOGE effects spread | |
Friday’s jobs report showed that opportunities dwindled for many | |
workers. Almost the entirety of the month’s employment gains (nearly | |
91%) was concentrated in just two sectors: health care and social | |
assistance, and leisure and hospitality. | |
Half of all major industries added jobs in May (or lost jobs, if | |
one’s a glass-half-empty type of person), according to the BLS’ | |
employment “diffusion index.” Across manufacturing, only 41.7% of | |
industries added jobs. | |
“When manufacturing is losing jobs and the diffusion index suggests | |
those losses are broad, it’s more indicative of an industry-wide | |
phenomenon, and could warrant concern for the broader economy,” | |
Elizabeth Renter, NerdWallet’s senior economist, wrote in a note | |
Friday. | |
Overall last month, the lost 8,000 jobs. | |
The largest job losses in May, however, occurred in the federal | |
government, which saw its employment bloodletting worsen due to the | |
Trump administration’s efforts to slash the federal workforce and gut | |
agencies and spending. | |
The federal government has posted job losses for four consecutive | |
months, dropping 13,000 jobs in February, 11,000 in March, 13,000 in | |
April, and another 22,000 in May. | |
There’s more to come on that front. The bulk of the losses to date | |
likely reflect early retirements versus Department of Government | |
Efficiency-driven layoffs, Swonk said. The losses from the latter could | |
be spread out over many months to come: Not all federal workers were | |
laid off immediately and other actions are being challenged in court. | |
The federal workforce represents a tiny share of overall employment; | |
however, Trump’s federal cuts appear to causing collateral damage in | |
the private sector, Swonk said, noting job losses at scientific labs. | |
BLS data shows that scientific, research and development services lost | |
3,900 jobs in May, which followed a 4,400-job loss in April. On a | |
year-to-date basis, that industry is running in the red for the first | |
time since the Covid-19 pandemic. | |
A ‘good enough’ report to keep the Fed on hold | |
The BLS’ monthly snapshot of the labor market is composed of two | |
surveys: One of businesses (which measures employment, hours and | |
earnings), and one of households (which provides demographic data and | |
feeds into the all-important unemployment rate). | |
While the household survey tends to have more volatility, May’s | |
readings from that particular wing of the report rang more alarm bells | |
than usual. | |
The unemployment rate didn’t budge, but more workers left the labor | |
market. The labor participation rate fell by 0.2 percentage points to | |
62.4%. And while the labor force losses were broad-based, they were | |
more heavily concentrated in women over the age of 55 and men of prime | |
working age (25 to 54), Swonk said. | |
The household survey also indicated that more people who were not | |
working were instead in school or training. | |
“That tends to be something that happens when the labor market | |
weakens,” she said. | |
But for now, the labor market is “good enough” and “strong | |
enough” to keep the Federal Reserve in its holding pattern as higher | |
tariffs have reignited concerns about inflation, Wells Fargo economists | |
wrote in a note to clients Friday. | |
Key inflation data is due out next week with the release of the | |
Consumer Price Index and Producer Price Index on Wednesday and | |
Thursday, respectively. | |
“That said, with both the soft and hard data on the labor market | |
showing employment conditions softening, we still expect [Fed | |
policymakers] to be cutting later this year,” they wrote. | |
Trump, however, reiterated Friday that he’d like to see interest | |
rates go down sooner than later. In posts on his Truth Social site, the | |
Fed’s current benchmark rate is “costing our country a fortune” | |
and that “borrowing costs should be MUCH LOWER!!!” | |
<- back to index |