Unemployment holds steady, with 139,000 jobs added in May
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The U.S. economy added 139,000 jobs in May, while the unemployment rate held at 4.2%, the Bureau of Labor Statistics said on Friday.
Why it matters: The labor market's headline numbers were healthy as President Trump's volatile trade war played out last month.
- Forecasters anticipated the economy would add 125,000 jobs in May.
- Pay for private-sector workers trended up at a faster rate: average hourly payrolls rose 3.9% last month, up from 3.7% in April.
Between the lines: The headline job gains mask some of the worrying underlying details in the report.
- The government said that employment was revised down for March and April by a combined 95,000 lower than initially estimated.
- Jobs gains were concentrated in a handful of sectors — notably, health care — as has been the case for several months.
What to watch: Several other sectors saw muted gains, or outright contraction.
- Federal employment continued to decline last month, with another 22,000 jobs shed — a sign that DOGE layoffs are weighing on the economy. The sector has lost nearly 60,000 jobs since January.
- Labor force participation — those with a job or actively looking for one — fell by 0.2 percentage point. Participation among prime-age workers aged between 25-54 fell by the same amount.
The big picture: Trade tensions whipsawed last month, as tariffs on Chinese imports were 145% in the first half of May before the Trump administration announced a trade truce that brought levies down to 30% for 90 days.
- The jobs figures out on Friday will be eyed closely by Federal Reserve officials, who are looking for clues about how the trade war is playing out across the economy.
- Trump spoke with Chinese president Xi Jinping this week for more than an hour about trade issues, a crucial sign of progress after trade talks appeared to be breaking down.
Editor's note: This story has been updated with details from the jobs report.
