The United States added 139,000 jobs in May, according to new data from the Bureau of Labor Statistics (BLS), surpassing the projected 120,000 jobs. While the growth exceeded forecasts, it still marks a decline from April’s revised increase of 147,000 jobs. The unemployment rate held steady at 4.2%, hovering near historic lows.
Federal government job losses continue to mount, with nearly 22,000 roles eliminated in May. Since January, the federal workforce has eliminated approximately 59,000 positions, primarily driven by President Donald Trump and the Department of Government Efficiency’s (DOGE) mission to shrink the federal government.
Despite the steady pace of job creation, several indicators point to a softening labor market. The ratio of employed individuals to the U.S. population fell to 59.7%, its lowest level since the onset of the pandemic. Additionally, the percentage of Americans who have stopped looking for work rose to 4.5%.
The Labor Department also reported a rise in weekly joblessness claims, the highest levels since October. Continued unemployment claims remain elevated, suggesting that it’s taking job seekers longer to find new employment.
Looking ahead, a recent study from the Congressional Budget Office forecasts that inflation will rise by 0.4% in 2025 and 2026, driven by changes in U.S. trade policies, including those implemented by President Trump’s tariffs. As higher prices erode consumer purchasing power, businesses may slow hiring efforts to manage rising operational costs.
Analysts predict that the frequency of layoffs will pick up in the months ahead. Meanwhile, data from the BLS reveal that businesses are pulling back on labor investments, with hiring rates remaining at the same levels as in 2014 when the country was recovering from the Great Recession.
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