May Jobs Report: The Labor Market Is Slowing Down
On the surface, this looks like an OK jobs report. The monthly employment situation summary from the labor department shows the addition of 139,000 jobs, in line with recent growth as well as economists’ predictions, and an unemployment rate marching in place at 4.2%.
Dig deeper, and the cracks start to show.
The labor force participation rate and the employment-population ratio both ticked lower last month. Meanwhile, the Bureau of Labor Statistics revised March and April’s tallies to reflect 95,000 fewer jobs added than previously reported.
As has been the case in recent reports, employment gains are also concentrated in just a few industries. Just three saw growth this month: healthcare, leisure and hospitality, and social assistance. Business and professional services, which typically shows faster occupational growth than the average across industries, has been flat for months.
Meanwhile, DOGE-related declines in government employment are just beginning to show up in the jobs report. Workers on paid leave or severance are still counted as employed by the BLS. Any job losses related to tariffs will also take a while to hit the official tally.
“We’re throttling back — and the damage from the trade war is still coming,” said Mark Zandi, chief economist at Moody’s Analytics, speaking with NBC News before today’s jobs report.
What Experts Are Saying
“The unemployment rate held steady, but other measures from the monthly survey of households were less encouraging. The labor force shrank by 625,000 in May and the participation rate — the share of adults working or looking for work — fell by two tenths of a point.” – Ben Casselman, The New York Times
“This is not a freeze, but a temporary chill. Employees are staying put, employers are holding steady, and everyone is waiting for clearer signs.” – Ger Doyle, regional president for North America at ManpowerGroup, reported by Alicia Wallace at CNNBusiness
“Employment at temporary help agencies fell by 20,000 jobs in May. Economists often consider declines in temporary hiring to be an early sign of softness in the labor market because companies are less reluctant to cut temps than permanent employees.” – Ben Casselman, The New York Times
“Remember there’s two surveys on which the report is based. The household survey, it turns out, is much weaker than the payroll number indicates. There’s a 625,000 decline in employment in the former, more than cancelling out the April advance. And the size of the labor force shrank -- even as the participation rate declined. Those aren’t encouraging figures.
“Now, in the past few years we’ve occasionally seen dark signs in the household survey, but the payroll gains have proved the better indicator. Even so, some economists may flag the household survey as a potential sign of things to come…” – Chris Anstey, Senior Editor, Bloomberg
Just Give Me the Data, Please
The Employment Situation Summary by the numbers:
Total nonfarm employment: 139,000 jobs added
Unemployment rate: 4.2% (flat)
Long-term unemployed: 1.5 million (-218,000)
Labor force participation rate: 62.4% (-0.2 percentage point)
Employment-population ratio: 59.7% (-0.3 percentage point)
People employed part-time for economic reasons: 4.6 million (little changed)
People who want jobs and have looked for work in the last year: 1.6 million (little changed)
Discouraged workers: 381,000 (little changed)
Average hourly earnings: +15 cents (0.4%) to $36.24
Industries that added jobs:
Healthcare (+62,000 jobs)
Leisure and hospitality (+48,000 jobs)
Social assistance (+16,000 jobs)
Industry that lost jobs:
Federal government (-22,000 jobs)
Industries that remained flat:
Mining, quarrying, and oil and gas extraction
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Financial activities
Professional and business services
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