US Economy Adds 139K Jobs in May, Meets Forecasts

The U.S. economy added 139,000 new jobs last month, surpassing economists’ expectations and indicating that the U.S. labor market remains in a robust position.

According to the Bureau of Labor Statistics, the unemployment rate held steady at 4.2 percent for the third consecutive month.

The median estimate suggested 130,000 new jobs and a 4.2 percent jobless rate, FactSet Insights reported ahead of the May employment figures.

Average hourly earnings rose 0.4 percent monthly, higher than the consensus estimate. On a year-over-year basis, average hourly earnings were unchanged at a higher-than-expected 3.9 percent.

Shortly after the employment data were released, President Donald Trump touted the May jobs report.

“America is hot! Six months ago it was cold as ice! Border is closed, prices are down. Wages are up!” Trump wrote in all caps in a Truth Social post.

The labor force participation rate dipped to 62.4 percent from 62.6 percent. Average weekly hours were also flat at 34.3.

Health care led last month’s employment gains, with payrolls rising by 62,000 and above the 12-month average of 44,000.

Employment in leisure and hospitality surged by 48,000, followed by social assistance (16,000).

Federal government employment fell by 22,000 and is down by 59,000 since the beginning of the year. Manufacturing payrolls also slumped by 8,000.

The household portion of the nonfarm payrolls report, which removes duplication, revealed a sharp decline of 696,000 new jobs.

Full-time employment decreased by 623,000, while part-time jobs edged up by 33,000. The number of people working two or more jobs decreased for the second straight month, declining by 283,000.

In a sign that individuals who have been out of work for 27 weeks or more may be finding employment, the number of long-term unemployed fell by 218,000 to 1.5 million.

The divergence between U.S.- and foreign-born workers has been a key feature in the labor market over the past several years. Last month, both categories of workers shed jobs.

The number of employed native-born workers declined by 444,000, and the number of employed foreign-born workers fell by 224,000.

Revisions were also sizable, with April’s number revised lower by 30,000 to 147,000. The March reading was also adjusted down by 65,000 to 120,000.

Market Reaction

Investors cheered the latest employment data before the opening bell.

The leading U.S. stock market benchmark averages advanced by as much as 0.8 percent.

Yields on U.S. Treasury securities were also in the green. The benchmark 10-year Treasury yield firmed above 4.45 percent.

The U.S. dollar index, a measure of the greenback against a weighted basket of currencies, rose by about 0.3 percent. Still, the index is poised for a weekly loss of 0.3 percent and is down by nearly 9 percent this year.

“Overall, the labor market remains stable, and there’s no sign that the negative sentiment and uncertainty hovering over the market is having any real impact on jobs,” said Jay Woods, the chief global strategist for Freedom Capital Markets.

But while the jobless rate is hovering above 4 percent, some weakness is forming in the labor market, Woods added.

Slow and Steady

A flurry of employment data this week sent mixed signals about the state of the U.S. labor market.

Job vacancies, for example, unexpectedly increased in April. The Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) reported on June 3 that the number of job openings increased by approximately 200,000 to a higher-than-expected 7.4 million in April.

Quits, a measure economists monitor to gauge workers’ confidence about the broader job market, fell by 150,000 to a four-month low of 3.19 million.

Private employers added fewer jobs than market watchers anticipated.

In May, the private sector created 37,000 new jobs, from the downwardly revised 60,000 in April, according to payroll provider ADP’s National Employment Report. This came in below the consensus forecast of 115,000.

“After a strong start to the year, hiring is losing momentum,” Nela Richardson, the chief economist at ADP, said in the report.

This prompted President Donald Trump to demand that the Federal Reserve lower interest rates.

“ADP NUMBER OUT! ‘Too Late’ Powell must now LOWER THE RATE,” Trump said in a June 4 Truth Social post. “He is unbelievable! Europe has lowered NINE TIMES!”

Layoffs have slowed, but unemployment filings have edged up.

Global outplacement firm Challenger, Gray and Christmas data found that U.S.-based employers announced 93,816 planned job cuts last month. While this is up by 47 percent from a year ago, they are also down by 12 percent from April.

“Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies’ workforces,” said Andrew Challenger, the firm’s senior vice president.

Department of Labor numbers for the week ending May 31 revealed a modest uptick in first-time unemployment filings.

Initial jobless claims rose by 8,000 to a higher-than-expected 247,000, the highest reading since early October. Continuing claims, which measure the number of unemployed individuals currently receiving unemployment benefits, softened slightly to 1.904 million.