The May jobs report showed the US labor market remained strong despite pressure from President Trump’s new tariff policies.
The US economy added 139,000 nonfarm payrolls in May, beating economists’ expectations of 126,000. The unemployment rate remained steady at 4.2%.
In April, the economy added 177,000 jobs with the unemployment rate also holding steady at 4.2%. However, that figure was revised down on Friday to show that only 147,000 jobs were added last month.
A revision of March and April data revealed that the US labor market actually added 95,000 fewer jobs than previously estimated.
“We are seeing a slowdown in the labor market,” said EY Chief Economist Gregory Daco . “There is no denying it. But this is not a sudden drop. And this is what was most concerning before.”
The report sparked a rally in the stock market. Dow Jones futures rose 0.7%, while the S&P 500 gained 0.8% and contracts for the technology-heavy Nasdaq 100 jumped 0.9%.
Average hourly earnings in May rose 0.4% from the previous month and 3.9% from a year ago. Economists had expected a 0.3% increase month-on-month and 3.7% year-on-year. Meanwhile, the labor force participation rate fell to 62.4% from 62.6% the previous month.
The report came as other indicators showed signs of a slowdown in the labor market. On Wednesday, ADP data showed the private sector added just 37,000 jobs in May — the lowest monthly number in more than two years. On Thursday, weekly claims for unemployment benefits hit their highest level since October 2024. Continuing claims remained near their highest level in nearly four years.
